CHIC MILLER'S CHEVROLET

3:04cv41(JBA).

352 F.Supp.2d 251 (2005) | Cited 5 times | D. Connecticut | January 14, 2005

RULING ON DEFENDANT'S MOTION FOR SUMMARY JUDGMENT [DOC. #22]

Plaintiff, operator of a Connecticut Chevrolet dealership, hasbrought suit against Defendant General Motors for breach ofcontract and violation of the Connecticut Franchise Act.Defendant moves for summary judgment on both claims as well asits counterclaims. For the reasons that follow, Defendant'sMotion for Summary Judgment [doc. #22] is GRANTED, butDefendant's request for attorney fees is denied.

I. FACTUAL BACKGROUND

Chapin W. Miller has operated Chic Miller's Chevrolet, aGeneral Motors (GM) dealership, in Bristol, Connecticut, since1967. He began as a mail clerk with General Motors AcceptanceCorporation (GMAC) and worked his way up through the ranks untilacquiring the dealership. Through 2002, Chic Miller's Chevroletwon several service awards from GM.

As part of its operations, Chic Miller's entered into wholesalelending agreements, commonly known as floor financing plans, to enable it to purchase new vehicles from GM. At first,the dealership had floor financing through GMAC. Beginning in2001, however, Miller believed that GMAC was charging interest"at an inappropriately high rate." Miller Aff. ¶ 17. Unable tonegotiate GMAC's rates down, Miller obtained a substitute lendingagreement, with a lower interest rate, from Chase Manhattan Bank.In November 2002, Chase withdrew from providing further floorplan financing to Chic Miller's Chevrolet, and Miller was forcedto look elsewhere. He applied to GMAC to resume the previousfinancing arrangement, but GMAC declined. In July 2003, Millerrequested that GM intervene and encourage GMAC to extend credit,but GM never did and Miller was unable to obtain a loan eitherfrom GMAC or any other lender.

Miller alleges that "[w]hen [he] sought to resume using GMACfor floor plan financing, comments made to [him] by GMAC managersmade it clear that they were `punishing' [him] for having usedChase Bank for a period of time. GMAC managers also encouragedother lenders to avoid working with [him]." Miller Aff. ¶ 20.Based on GM's previous effort to enlist him in buying out anotherGM dealership in the Bristol area, Miller believed that GM wasattempting to reduce the number of dealerships in that area fromthree to two. Id. at ¶ 24. Miller claims that GM's desire towinnow the dealerships in Bristol "would explain why GMC did notgive Chic Miller's Chevrolet the kind of assistance that it traditionally has given to other established dealerships." Id.

Chic Miller's Chevrolet is operated pursuant to a Dealer Salesand Service Agreement ("dealership contract" or "the contract").See Ragsdale Aff. [doc. #21] Ex. A. Under Article 10,"Capitalization," the contract provides: 10.2 Wholesale Floorplan To avoid damage to goodwill which could result if Dealer is financially unable to fulfill its commitments, Dealer agrees to have and maintain a separate line of credit from a creditworthy financial institution reasonably acceptable to General Motors and available to finance the Dealer's purchase of new vehicles in conformance with the policies and procedures established by General Motors. . . .Id. at 13. Under section 13.1.11, General Motors may terminatethe agreement for "Failure of Dealer to maintain the line ofcredit required by Article 10." Section 13 requires GM to givethe dealer notice and 30 days to correct such a breach, andallows GM to terminate the agreement with 60 days notice if thebreach is not remedied.

On December 20, 2002, GM sent a letter to Miller notifying himthat, without an inventory financing arrangement, Chic Miller'sChevrolet was in breach of Section 10.2 of the dealershipcontract. Ragsdale Aff. Ex. C. An amended notice was sent onJanuary 2, 2003. Id. at Ex. D. On March 7, 2003, GM sentanother letter advising Chic Miller's that it was in breach ofthe agreement, stating that Miller's representations that hewould obtain new financing or arrange to sell the dealership so far had not come to fruition, and giving the dealership untilMarch 31, 2003, to find acceptable floor plan financing. Id. atEx. G. Miller apparently was unable to do so. On May 14, 2003, GMnotified Miller that it was terminating the dealership contracteffective 90 days from receipt of the letter unless Millerobtained a floor plan before July 1. Id. at Ex. H.

In June 2003 Chic Miller's requested mediation pursuant to theterms of the dealership contract. The mediation was concluded,unsuccessfully, on October 1, 2003. Ragsdale Aff. ¶ 21.1

On January 9, 2004, GM sent another termination notice to thedealership, notifying Miller that GM was terminating the contractbecause the dealership was insolvent, in further breach of thecontract. Id. at Ex. J. The parties dispute whether ChicMiller's is, in fact, insolvent, and the plaintiff has submittedan affidavit from its accountant stating that as of April 26,2004, it had sufficient assets to cover its liabilities. MolloAff. [doc. #36] ¶ 6.

On February 19, 2004, Miller entered into an agreement withKenneth Crowley, owner of several automobile dealerships inBristol, Plainville and Hartford, Connecticut, for the sale andpurchase of Chic Miller's Chevrolet for $500,000. See Crowley Aff. Ex. 1. The agreement was contingent on GM's approval. WhenCrowley signed the agreement, he was planning to move theChevrolet dealership and combine it with his existingBuick-Oldsmobile dealership. Ragsdale Aff. ¶ 35. By letter datedMarch 3, 2004, GM informed Miller that a combined Chevrolet-Buickdealership was contrary to GM's marketing plan, and that therelocation of Chic Miller's Chevrolet might be subject to protestby other Chevrolet dealers in a fourteen mile radius. Id. atEx. N. In addition, GM took the position that its contract withChic Miller's Chevrolet was terminated by the previous writtennotices, and therefore any transfer of the dealership would be"moot." Id. at ¶ 39. GM informed Miller that it did "not intendto approve the transaction as submitted." Id. at Ex. N. GM hasnot yet formally rejected the sale and purchase agreement.

On March 10, 2004, GM sent yet another termination letter toMiller. Ragsdale Aff. Ex. P. This letter alleges that ChicMiller's Chevrolet was closed for business for seven consecutivedays, between March 1 and March 8, 2004, in breach of thedealership contract.2 Miller denies this allegation,asserting that the dealership was closed only between March 1 andMarch 5, 2004, due to a broken pipe that damaged the furnace inthe building. Miller Aff. ¶ 26.3 As an indication that thedealership was open for business, it points to anadvertisement4 published in The Bristol Press on March 8,2004, stating: "Chic Miller Chevrolet Collision Repair Center isstill open . . ." Id. at Ex. E. Miller also alleges that hesold one car from his dealership on April 14, 2004, but GMcounters, without response, that it was a used car and thatMiller has not bought any new cars from GM for resale sinceNovember 2002.

II. PROCEDURAL BACKGROUND

On December 12, 2003, Chic Miller's Chevrolet filed suitagainst GM in the Connecticut Superior Court, Judicial Districtof Hartford. On January 12, 2004, GM removed the case pursuant to28 U.S.C. § 1441(a), invoking this Court's diversity jurisdictionunder 28 U.S.C. § 1332. Notice of Removal [doc. #1].

The plaintiff filed an Amended Complaint [doc. #19] on March15, 2004. The two-count complaint alleges: breach of contract forfailing to assist the plaintiff in obtaining floor plan financingand failing to approve the sale of the dealership to Crowley; and violations of the Connecticut Franchise Act, Conn.Gen. Stat. § 42-133v, for failing to act in good faith interminating the contract, failing to give proper notice of thetermination,5 and refusing to approve the sale. On March25, 2004, GM filed an Amended Answer and Counterclaim [doc. #20].The counterclaim alleges that Plaintiff breached the dealershipagreement by: failing to maintain floor plan financing enablingthe dealership to purchase new vehicles from General Motors forresale to customers; becoming insolvent; and failing to conductcustomary sales and service operations. GM also moves for summaryjudgment on its counterclaim that plaintiff should be denied theprotections afforded by § 42-133v(g) of the Connecticut franchisestatute and should be held liable for defendants' attorney feesbecause the litigation was brought in bad faith.

III. STANDARD

Summary judgment is appropriate under Federal Rule of CivilProcedure 56(c) when the moving party establishes that there isno genuine issue of material fact to be resolved at trial andthat the moving party is entitled to judgment as a matter of law.See Celotex Corp. v. Catrett, 477 U.S. 317 (1986).Materiality is determined by the substantive law that governs the case.Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Inthis inquiry, "[o]nly disputes over facts that might affect theoutcome of the suit under the governing law will properlypreclude the entry of summary judgment." Id. "Where the recordtaken as a whole could not lead a rational trier of fact to findfor the nonmoving party, there is no genuine issue for trial."Matsushita Elec. Indus. Co. v. Zenith Radio Corp.,475 U.S. 574, 586 (1986).

In moving for summary judgment against a party who will bearthe ultimate burden of proof at trial, the movant's burden ofestablishing that there is no genuine issue of material fact indispute will be satisfied if it can point to an absence ofevidence to support an essential element of the non-movingparty's claim. Celotex, 477 U.S. at 322-23. "A defendant neednot prove a negative when it moves for summary judgment on anissue that the plaintiff must prove at trial. It need only pointto an absence of proof on plaintiff's part, and, at that point,plaintiff must `designate specific facts showing that there is agenuine issue for trial.'" Parker v. Sony Pictures Entm't,Inc., 260 F.3d 100, 111 (2d Cir. 2001) (quoting Celotex,477 U.S. at 324); see also Gallo v. Prudential ResidentialServs., 22 F.3d 1219, 1223-1224 (2d Cir. 1994) ("the movingparty may obtain summary judgment by showing that little or noevidence may be found in support of the nonmoving party's case."). The nonmovingparty, in order to defeat summary judgment, must come forwardwith evidence that would be sufficient to support a jury verdictin his or her favor. Anderson, 477 U.S. at 249 ("there is noissue for trial unless there is sufficient evidence favoring thenonmoving party for a jury to return a verdict for that party").In making this determination, the Court draws all reasonableinferences in the light most favorable to the party opposing themotion. Matsushita, 475 U.S. at 587. However, a party opposingsummary judgment "may not rest upon the mere allegations ordenials of the adverse party's pleading," Fed.R.Civ.P. 56(e),and "some metaphysical doubt as to the material facts" isinsufficient. Id. at 586 (citations omitted).

IV. DISCUSSION

A. Breach of Contract

Miller has alleged that GM breached the dealership contract intwo ways: failing to assist Miller in obtaining floor planfinancing; and failing to approve the sale of Chic Miller'sChevrolet to Kenneth Crowley.

1. Floor Plan Financing

"Where the language of the contract is unambiguous, andreasonable persons could not differ as to its meaning, thequestion of interpretation is one of law to be answered by thecourt." Hunt Ltd. v. Lifschultz Fast Freight, Inc., 889 F.2d 1274, 1277 (2d Cir. 1989) (quoting Rothenberg v. Lincoln FarmCamp, Inc., 755 F.2d 1017, 1019 (2d Cir. 1985)). "Contractlanguage is not ambiguous if it has a definite and precisemeaning, unattended by danger of misconception in the purport ofthe [contract] itself, and concerning which there is noreasonable basis for a difference of opinion." Id. (internalcitation omitted).

Here, the Dealer Sales and Service Agreement is unambiguous.Article 10.2, entitled "Wholesale Floorplan," provides that"Dealer agrees to have and maintain a separate line of credit . . .available to finance the Dealer's purchase of newvehicles. . . ." (emphasis supplied). This language places theresponsibility on the dealer, not on GM or any other party, toobtain and maintain a floor plan lending arrangement. Noobligations on the part of GM are mentioned anywhere in thearticle.

Miller argues, however, that two provisions of Article 5,entitled "Dealer's Responsibility to Promote, Sell, and ServiceProducts," obligate GM to assist him with finding floor planfinancing. Section 5.3, captioned "Customer Satisfaction,"requires the Dealer to generally act in a way that satisfies GMcustomers, and then provides that "General Motors agrees toprovide Dealer with reasonable support to assist Dealer'sattainment of customer satisfaction." It continues by laying outa process by which GM will evaluate customers' satisfaction concerning each dealer. Ragsdale Aff. Ex. A at 7.

Section 5.4, entitled "Business Planning," reads: General Motors has established a business planning process to assist dealers. Dealer agrees to prepare and implement a reasonable business plan if requested by General Motors. General Motors agrees to provide Dealer with information specific to its dealership, and if requested, to assist Dealer in its business planning as agreed upon by Dealer and General Motors."Id. (emphasis supplied).

The plain language of Sections 5.3 and 5.4 shows them to beinapplicable to the issue of floor plan financing. First, nothingin Section 5.3 connects general concerns about "customersatisfaction" to the specific requirement that a dealer maintainfloor plan financing. While customers might be dissatisfiedshould they not find a range of new vehicles available at thedealership, due to the dealership's inability to purchase newvehicles from GM, the issue of floor plan financing is addressedspecifically in Section 10.2. It "is a fundamental rule ofcontract construction that `specific terms and exact terms aregiven greater weight than general language.'" Aramony v. UnitedWay of Am., 254 F.3d 403, 413 (2d Cir. 2001) (quotingRestatement (Second) of Contracts § 203(c) (1981)). Thus thegeneral obligation of GM to "provide Dealer with reasonablesupport to assist Dealer's attainment of customer's satisfaction"cannot be read as a specific requirement that GM assist a dealerin obtaining a floor plan line of credit where anothercontractual section expressly references only the dealer's agreed undertakingto obtain and maintain the requisite credit line.

Similarly, GM's agreement in Section 5.4 to help the Dealerwith business planning does not apply to the issue of floor planfinancing. The language of the section itself does not mentionfloor plan financing or include it specifically as part of abusiness plan. While floor plan financing generally could be partof a dealer's business plan, floor plan loans are specificallyaddressed in Section 10.2, which places the responsibility on thedealer, not GM, to obtain and maintain the required creditarrangement. The general obligation of GM "to assist Dealer inits business planning," see Section 5.4, does not negate thespecific contractual obligation of the dealer to "have andmaintain a separate line of credit . . . available to finance theDealer's purchase of new vehicles . . ." under Section 10.2.

Plaintiff argues that even if there is nothing in the languageof the contract that obligated GM to assist him in obtainingfloor plan financing, GM should have done so because it had doneso in the past for other dealers and it had the ability to do so,as it could have pressured GMAC, its wholly owned subsidiary, toextend a loan.6 Where the contract itself is unambiguous, the contract's "meaning must be determined from thefour corners of the instrument without resort to extrinsicevidence of any nature," Goodheart Clothing Co. v. Laura GoodmanEnter., Inc., 962 F.2d 268, 272 (2d Cir. 1992), such as "tradecustom and usage," which "is not admissible to contradict orqualify [the] provisions" of an unambiguous contract. Hunt,889 F.2d at 1277-78 (internal citations omitted). Therefore even ifPlaintiff can demonstrate that GM had the ability to assistdealers in obtaining financing from GMAC and had done so in thepast, that evidence is not admissible to modify what the writtendealership contract obligated Plaintiff to do.

Miller further alleges that one reason he was unable to obtainfloor plan financing is that GMAC was "`punishing' [him] forhaving used Chase Bank for a period of time" and that "GMACmanagers also encouraged other lenders to avoid working with[him]." Miller Aff. ¶ 20. Miller does not provide any admissibleevidentiary support for these allegations beyond the fact thatPlaintiff used to use GMAC for its floor plan financing but switched to Chase for more advantageous terms. GMAC is not adefendant in this action, so even if Miller's assertions aboutGMAC's animus could be proved, its motivation for not lending toPlaintiff is not probative of whether Defendant GM acted in badfaith.

Therefore, the Court finds that there is no dispute of materialfact concerning Chic Miller's lack of floor plan financing afterNovember 2002. Article 10.2 of the dealership contractunambiguously places the burden on the dealer to find andmaintain floor plan financing. Without floor plan financing, theplaintiff was in clear breach of Section 10.2 of the dealershipcontract, justifying GM's termination of the contract underSection 13.1.11 (GM may terminate contract for "[f]ailure ofdealer to maintain the line of credit required by Article 10.").GM is entitled to judgment as a matter of law on its counterclaimon that basis and on the plaintiff's breach of contract claiminsofar as it is based on GM's alleged failure to assistplaintiff in obtaining a floor plan.

2. Sale of Dealership to Crowley

Plaintiff also bases his breach of contract claim on GM'sindication that it would refuse to approve the sale of ChicMiller's Chevrolet to Kenneth Crowley. The sale was proposed inFebruary 2004, two months after Chic Miller's commenced thislawsuit, one month after GM asserted its counterclaim, and, more importantly, after GM terminated the dealership contract December15, 2003.7 Ragsdale Aff. Ex. H. The Court has previouslyfound that GM's May 14, 2003 termination notice was justifiedbecause Chic Miller's Chevrolet breached the franchise contractby failing to maintain floor plan financing.

Thus at the time the Crowley sale was proposed, Miller nolonger had a franchise to transfer to Crowley.8 "It is ageneral principle of contract law that an assignment operates totransfer to the assignee only those rights and interestspossessed by the assignor." See Glenn v. Exxon Co., U.S.A.,801 F. Supp. 1290, 1297 (D. Del. 1992) (citing Restatement(Second) of Contracts § 336, comment b (1981)) (emphasis inoriginal). Therefore, "if a franchisor has established thenecessary grounds and followed the required procedures, once thefranchise is terminated the franchisee cannot sell the franchise,unless the parties have so agreed." Auth. Foreign CarSpecialists v. Jaguar Cars, Inc., No. 92-3760(HLS), 1994 U.S.Dist. Lexis 10631 at *10 (D.N.J. Feb. 28, 1994) (unpublished), aff'd 79 F.3d 1137 (3d Cir.1994).9 In Authorized Foreign Car Specialists, underfacts similar to the instant case, a franchisee attempted to sellits car dealership to a successor dealer eight days after theeffective date of a termination notice from the franchisor.Because the franchisee no longer had anything to sell, thefranchisor was found not to have breached the dealershipagreement by refusing to approve the transfer. Id. Here,Miller's franchise was terminated at the time he applied totransfer the franchise, so Miller had nothing left to transferand GM could not be found to have breached the dealershipcontract by failing to approve the sale.

For the reasons above, GM is entitled to judgment as a matterof law on the plaintiff's breach of contract claim insofar as theclaim is based on GM's indication that it would not approve thesale of the dealership to Crowley.

B. Connecticut Franchise Statute

In order to lawfully terminate a franchise under theConnecticut dealer statute, a franchisor must: provide noticethat complies with statutory requirements; have "good cause" for the termination; and act "in good faith." Conn. Gen. Stat. §42-133v(a);10 see also Richard Subaru, Inc. v. Subaruof New England, 8 F. Supp. 2d 164, 169 (D. Conn. 1998).

"Good cause" exists if "[t]here is a failure by the dealer tocomply with a provision of the franchise which is both reasonableand of material significance to the franchise relationship . . ."Conn. Gen. Stat. § 42-133v(b). According to James Ragsdale,Northeast Region Zone Manager for GM, floor plan financing is amaterial aspect of a dealership agreement because "without floorplan financing, a dealership is unable to purchase motor vehicleinventory, which, in turn, severely limits a dealership's abilityto earn income from vehicle sales." Ragsdale Aff. ¶ 7. "If adealership is without floor plan financing for an extended periodof time, it will eventually lose its ability to generate revenuesand become financially insolvent, and will not be able to conductcustomary sales and service operations." Id. at ¶ 8. Millerdoes not dispute that floor plan financing is a material term ofhis franchise contract with GM. As discussed above, GM wasjustified under the contract in terminating Miller's franchise for failure to maintain floorplan financing. Because that term is material to the agreement,GM had "good cause" under the Connecticut dealer statute forterminating the franchise because of Miller's uncuredbreach.11

GM also had good cause to terminate the contract because it hasshown that Chic Miller's Chevrolet failed to conduct customarysales and service operations between March 1 and March 8, 2004. Asign posted on the door of the dealership during that timestated: "CHIC MILLER'S CHEVROLET IS CLOSED. Please bring yourvehicle to the dealer of your choice. Thank you for your pastpatronage." Ragsdale Aff. ¶ 41, Ex. O. Although Miller assertsthat the dealership was only temporarily closed for repair, thesign does not say that the dealership would reopen, and thephrases "bring your vehicle to the dealer of your choice" and"thank you for your past patronage" certainly suggest permanentclosure, not a burst water pipe. Miller points to one newspaperadvertisement for body work business on March 8, 2004 and one car sale on April 14, 2004, see Miller Aff. ¶ 29, 40,during the time he claims he was open and operating his business.This evidence vastly is insufficient to show the conduct ofregular, customary sales and service operations, which is amaterial part of the franchise agreement, and Section 14.5.3 ofthe dealership contract permits GM to terminate the agreement for"[f]ailure of the Dealer to conduct customary sales and serviceoperations during customary business hours for seven consecutivebusiness days." Ragdsdale Aff. Ex. A at 21. Since that term ismaterial to the agreement, GM had "good cause" under theConnecticut dealer statute for terminating the franchise becauseof Plaintiff's breach.

Chic Miller's Chevrolet alleges that by "prematurely seekingthe ultimate remedy of termination of the dealership franchise,the Defendant has not acted in good faith. . . ." Amended Compl.[doc. #19] ¶ 40. The undisputed record shows that GM extended theperiod several times for Miller to try to obtain replacementfloor plan financing after his arrangement with Chase ended. GMfirst notified Plaintiff of its breach of the dealership contracton December 20, 2002, with an amended notice on January 2, 2003,see Ragsdale Aff. Ex. D, and under the terms of the contract itcould have canceled the franchise after 30 days of that notice.However, on March 7, 2003, GM extended the deadline until March31, and when Miller was still unable to find a lender, GM gave him another extension until July 1. Id. at Ex. G, H. GM alsoprepared two letters at the request of Chic Miller's counselstating that the dealership would be in good standing with GMupon reinstatement of its floor plan financing arrangement. Id.at Ex. E, F. While Miller may have expected, based on GM's pastpractices, more than GM provided to him, Miller has not offeredevidence to show that GM was acting "prematurely" or in bad faithduring the course of the dealings recounted above.

Plaintiff argues that GM was acting in bad faith because of its"grand plan to reduce the market place [in the Bristol area] fromthree to two [Chevrolet] dealers." Pl. Opp. to Def. Motion forSummary Judgment [doc. #31] at 12. However, a long term plan thatcalled for reducing the number of dealerships in a possiblyoversaturated market is not alone evidence of bad faith.

Because Plaintiff has not offered evidence from which afactfinder could conclude that GM acted without good cause orgood faith,12 GM is entitled to judgment as a matter oflaw on Plaintiff's claims under the Connecticut Franchise Act.

Defendant further asserts that Plaintiff is not entitled to thesix month grace period under the Franchise Act. See Conn. Gen. Stat. § 42-133v(g).13 The statute provides that thefiling of a lawsuit challenging the termination of a franchisetolls the effective date of the termination for six months afterthe court's judgment, with several exceptions, including: (A) Insolvency of the dealer, or filing of any petition by or against the dealer under any bankruptcy or receivership law; (B) failure of the dealer to conduct customary sales and service operations during business hours for seven consecutive business days, except in circumstances beyond the direct control of the dealer . . .Conn. Gen. Stat. § 42-133v(d)(3).

As discussed supra, GM has shown that Chic Miller's Chevroletfailed to conduct customary sales and service operations forseven consecutive business days between March 1 and March 8,2004.14 For this reason Plaintiff is not entitled to the six month grace period provided in Conn. Gen. Stat. §42-133v(g). The six month safe harbor is intended to allow afranchisee to continue to operate or transfer a viable franchiseduring and after a legal dispute, so the safe harbor logicallywould not apply to a franchise that has gone out of business.Thus Chic Miller's Chevrolet is not entitled to the safe harborof § 42-133v(g).

C. Attorney Fees

GM argues that it is entitled to costs and attorney feesincurred in connection with defending this lawsuit becausePlaintiff filed it in bad faith and solely for the purpose ofdelay.15 Although the Court has found that GM is entitledto summary judgment on both claims in Plaintiff's complaint, GMhas not shown that the complaint was made totally in bad faith.

Based on his previous course of dealing with GM over 40 yearsand his knowledge of GM's treatment of and assistance to otherestablished dealerships, Miller cannot be said to have had nobasis for claiming that GM's intolerance of his breach was a badfaith method for accomplishing its business goals of eliminatingone dealership — a belief remotely supported by a 1998 statement of GM area manager Prestoy — or that GMAC's animuscould be attributable to GM, even though Plaintiff ultimatelycould not marshal evidence to elevate these claims beyond meremetaphysical belief. A party may be sanctioned for filing ameritless lawsuit solely for the purpose for delay, and theConnecticut Franchise Statute's six month grace period after thedisposition of a lawsuit could be used as a vehicle for delay.However, although the Court has determined that Miller is notentitled to the grace period, the Court cannot find that filingsuit to preserve the status quo to test his bad faith claim,while without merit, was so abjectly lacking in any arguablebasis to justify the significant sanctions sought. Therefore,GM's motion for attorney fees is denied.

V. CONCLUSION

For the foregoing reasons, Defendant's Motion for SummaryJudgment [doc. #22] is GRANTED as to both counts of Plaintiff'scomplaint and Defendant's counterclaim under Conn. Gen. Stat. §42-133v(g), but denied as to the request for attorney fees.Defendant's request for oral argument [doc. #27] is DENIED ASMOOT. The Clerk is directed to close this case.

IT IS SO ORDERED.

1. GM asserts, and Plaintiff does not dispute, that partiesthen agreed that the effective date of termination of thecontract was December 15, 2003. Ragsdale Aff. ¶ 21.

2. Section 14.5.3 of the contract permits GM to terminate theagreement for "Failure of Dealer to conduct customary sales andservice operations during customary business hours for sevenconsecutive business days." Ragsdale Aff. Ex. A at 21.

3. A sign posted on the door on March 1, 2003, stated: "CHICMILLER'S CHEVROLET IS CLOSED. Please bring your vehicle to thedealer of your choice. Thank you for your past patronage."Ragsdale Aff. ¶ 41, Ex. O.

4. Section 5.1.6 of the dealership contract provides: "Dealeragrees to advertise and conduct promotional activities that arelawful and enhance the reputation of Dealer, General Motors andits Products. . . ." Ragsdale Aff. Ex. A at 6.

5. Although plaintiff asserts an improper notice claim in hiscomplaint, he has not briefed it in his Opposition to GM's Motionfor Summary Judgment [doc. #31] and the Court deems this claimabandoned.

6. The only references in the record concerning therelationship between GM and GMAC are Plaintiff's assertion that"General Motors Corporation has a substantial level of authorityand ability to influence GMAC's decision making process on behalfof its dealers," "[GM] has traditionally given significantassistance to established dealers, including assistance insecuring floor plan financing," and "one of the fundamentalpurposes for the existence of GMAC is to provide [floor plan]financing for GMC dealers," Miller Aff. ¶¶ 16-17, and Defendant'sallegation that GMAC is "a separate corporation" independent ofGM. See Defendant's Amended Answer ¶ 12 et seq. Any factualdispute inferable from these statements is not material, however,because the contract did not obligate GM to assist Miller inobtaining a floor plan even if it could have done so.

7. See supra n. 1. The undisputed date of December 15,2003 precedes Miller's application to transfer the franchise toCrowley.

8. Although the Connecticut Franchise Act, Conn. Gen. Stat. §42-133v(g), allows a dealer to sell or transfer a franchise forup to six months after the conclusion of litigation under somecircumstances, Plaintiff does not meet the criteria for this safeharbor provision. See infra, § IV.B.

9. Even if termination has not yet taken effect, a franchiseeis only entitled to transfer his interest in any periodremaining. Glenn, 801 F. Supp. at 1297 (where plaintiffattempted to transfer gas station franchise after notice oftermination but before expiration of 90 day notice period,plaintiff entitled to transfer only remaining days in thatperiod); see also Portaluppi v. Shell Oil Co., 869 F.2d 245(4th Cir. 1989).

10. "Notwithstanding the terms, provisions or conditions ofany franchise agreement and notwithstanding the terms orprovisions of any waiver, no manufacturer or distributor shallcancel, terminate or fail to renew any franchise with a licenseddealer unless the manufacturer or distributor has satisfied thenotice requirement of subsection (d) of this section, has goodcause for cancellation, termination or nonrenewal and has actedin good faith." Conn. Gen. Stat. § 42-133v(a).

11. Although the Connecticut state courts have yet tointerpret the Connecticut "good cause" requirement, failure tomaintain floor plan financing was held to be good cause forterminating a car dealership under the Maryland franchisestatute, which is similar to Connecticut's. Hale Trucks of Md.v. Volvo Trucks N. Am., 224 F. Supp. 2d 1010, 1028 (D. Md.2002), interpreting Md. Code Ann., Transp. II, § 15-209(b) (2001)("A distributor may not terminate, cancel, or fail to renew thefranchise of a dealer, notwithstanding any term or provision ofthe franchise, unless: The dealer has failed to complysubstantially with the reasonable requirements of thefranchise. . .").

12. Plaintiff's complaint asserts that GM "failed to complywith the notice provisions of the Connecticut Franchise Act,"Amended Compl. ¶ 35, but Plaintiff has not briefed the issue andthe Court deems it abandoned. See supra n. 5.

13. "If a franchisee brings an action in a court of competentjurisdiction to challenge the cancellation, termination ornonrenewal of a franchise agreement by a manufacturer ordistributor under this section, such franchise agreement shallremain in full force and effect and such franchisee shall retainall rights and remedies pursuant to the terms and conditions ofsuch franchise agreement, including, but not limited to, theright to sell or transfer such franchisee's ownership interest,for a period of six months following a final determination by thecourt of competent jurisdiction, unless extended by the court ofcompetent jurisdiction for good cause. This subsection shall notapply to a cancellation, termination or nonrenewal of a franchiseagreement based upon any of the reasons set forth in subdivision(3) of subsection (d) of this section" [quoted in text above].Conn. Gen. Stat. § 42-133v(g).

14. Although GM also asserts that Chic Miller's Chevrolet wasinsolvent, the Mollo affidavit arguably contradicts thisallegation, see Mollo Aff. ¶ 6, and the Court's decision doesnot rest on this basis.

15. GM asserts in its summary judgment papers that Rule 11 ofthe Federal Rules of Civil Procedure also entitles it to attorneyfees. GM Mem. of Law in Support of Motion for Summary Judgment[doc. #23] at 24. However, a "motion for sanctions under [Rule11] shall be made separately from other motions or requests,"Fed.R.Civ.P. 11(c)(1)(A), and therefore is improperly broughtas part of Defendant's summary judgment motion.

RULING ON DEFENDANT'S MOTION FOR SUMMARY JUDGMENT [DOC. #22]

Plaintiff, operator of a Connecticut Chevrolet dealership, hasbrought suit against Defendant General Motors for breach ofcontract and violation of the Connecticut Franchise Act.Defendant moves for summary judgment on both claims as well asits counterclaims. For the reasons that follow, Defendant'sMotion for Summary Judgment [doc. #22] is GRANTED, butDefendant's request for attorney fees is denied.

I. FACTUAL BACKGROUND

Chapin W. Miller has operated Chic Miller's Chevrolet, aGeneral Motors (GM) dealership, in Bristol, Connecticut, since1967. He began as a mail clerk with General Motors AcceptanceCorporation (GMAC) and worked his way up through the ranks untilacquiring the dealership. Through 2002, Chic Miller's Chevroletwon several service awards from GM.

As part of its operations, Chic Miller's entered into wholesalelending agreements, commonly known as floor financing plans, to enable it to purchase new vehicles from GM. At first,the dealership had floor financing through GMAC. Beginning in2001, however, Miller believed that GMAC was charging interest"at an inappropriately high rate." Miller Aff. ¶ 17. Unable tonegotiate GMAC's rates down, Miller obtained a substitute lendingagreement, with a lower interest rate, from Chase Manhattan Bank.In November 2002, Chase withdrew from providing further floorplan financing to Chic Miller's Chevrolet, and Miller was forcedto look elsewhere. He applied to GMAC to resume the previousfinancing arrangement, but GMAC declined. In July 2003, Millerrequested that GM intervene and encourage GMAC to extend credit,but GM never did and Miller was unable to obtain a loan eitherfrom GMAC or any other lender.

Miller alleges that "[w]hen [he] sought to resume using GMACfor floor plan financing, comments made to [him] by GMAC managersmade it clear that they were `punishing' [him] for having usedChase Bank for a period of time. GMAC managers also encouragedother lenders to avoid working with [him]." Miller Aff. ¶ 20.Based on GM's previous effort to enlist him in buying out anotherGM dealership in the Bristol area, Miller believed that GM wasattempting to reduce the number of dealerships in that area fromthree to two. Id. at ¶ 24. Miller claims that GM's desire towinnow the dealerships in Bristol "would explain why GMC did notgive Chic Miller's Chevrolet the kind of assistance that it traditionally has given to other established dealerships." Id.

Chic Miller's Chevrolet is operated pursuant to a Dealer Salesand Service Agreement ("dealership contract" or "the contract").See Ragsdale Aff. [doc. #21] Ex. A. Under Article 10,"Capitalization," the contract provides: 10.2 Wholesale Floorplan To avoid damage to goodwill which could result if Dealer is financially unable to fulfill its commitments, Dealer agrees to have and maintain a separate line of credit from a creditworthy financial institution reasonably acceptable to General Motors and available to finance the Dealer's purchase of new vehicles in conformance with the policies and procedures established by General Motors. . . .Id. at 13. Under section 13.1.11, General Motors may terminatethe agreement for "Failure of Dealer to maintain the line ofcredit required by Article 10." Section 13 requires GM to givethe dealer notice and 30 days to correct such a breach, andallows GM to terminate the agreement with 60 days notice if thebreach is not remedied.

On December 20, 2002, GM sent a letter to Miller notifying himthat, without an inventory financing arrangement, Chic Miller'sChevrolet was in breach of Section 10.2 of the dealershipcontract. Ragsdale Aff. Ex. C. An amended notice was sent onJanuary 2, 2003. Id. at Ex. D. On March 7, 2003, GM sentanother letter advising Chic Miller's that it was in breach ofthe agreement, stating that Miller's representations that hewould obtain new financing or arrange to sell the dealership so far had not come to fruition, and giving the dealership untilMarch 31, 2003, to find acceptable floor plan financing. Id. atEx. G. Miller apparently was unable to do so. On May 14, 2003, GMnotified Miller that it was terminating the dealership contracteffective 90 days from receipt of the letter unless Millerobtained a floor plan before July 1. Id. at Ex. H.

In June 2003 Chic Miller's requested mediation pursuant to theterms of the dealership contract. The mediation was concluded,unsuccessfully, on October 1, 2003. Ragsdale Aff. ¶ 21.1

On January 9, 2004, GM sent another termination notice to thedealership, notifying Miller that GM was terminating the contractbecause the dealership was insolvent, in further breach of thecontract. Id. at Ex. J. The parties dispute whether ChicMiller's is, in fact, insolvent, and the plaintiff has submittedan affidavit from its accountant stating that as of April 26,2004, it had sufficient assets to cover its liabilities. MolloAff. [doc. #36] ¶ 6.

On February 19, 2004, Miller entered into an agreement withKenneth Crowley, owner of several automobile dealerships inBristol, Plainville and Hartford, Connecticut, for the sale andpurchase of Chic Miller's Chevrolet for $500,000. See Crowley Aff. Ex. 1. The agreement was contingent on GM's approval. WhenCrowley signed the agreement, he was planning to move theChevrolet dealership and combine it with his existingBuick-Oldsmobile dealership. Ragsdale Aff. ¶ 35. By letter datedMarch 3, 2004, GM informed Miller that a combined Chevrolet-Buickdealership was contrary to GM's marketing plan, and that therelocation of Chic Miller's Chevrolet might be subject to protestby other Chevrolet dealers in a fourteen mile radius. Id. atEx. N. In addition, GM took the position that its contract withChic Miller's Chevrolet was terminated by the previous writtennotices, and therefore any transfer of the dealership would be"moot." Id. at ¶ 39. GM informed Miller that it did "not intendto approve the transaction as submitted." Id. at Ex. N. GM hasnot yet formally rejected the sale and purchase agreement.

On March 10, 2004, GM sent yet another termination letter toMiller. Ragsdale Aff. Ex. P. This letter alleges that ChicMiller's Chevrolet was closed for business for seven consecutivedays, between March 1 and March 8, 2004, in breach of thedealership contract.2 Miller denies this allegation,asserting that the dealership was closed only between March 1 andMarch 5, 2004, due to a broken pipe that damaged the furnace inthe building. Miller Aff. ¶ 26.3 As an indication that thedealership was open for business, it points to anadvertisement4 published in The Bristol Press on March 8,2004, stating: "Chic Miller Chevrolet Collision Repair Center isstill open . . ." Id. at Ex. E. Miller also alleges that hesold one car from his dealership on April 14, 2004, but GMcounters, without response, that it was a used car and thatMiller has not bought any new cars from GM for resale sinceNovember 2002.

II. PROCEDURAL BACKGROUND

On December 12, 2003, Chic Miller's Chevrolet filed suitagainst GM in the Connecticut Superior Court, Judicial Districtof Hartford. On January 12, 2004, GM removed the case pursuant to28 U.S.C. § 1441(a), invoking this Court's diversity jurisdictionunder 28 U.S.C. § 1332. Notice of Removal [doc. #1].

The plaintiff filed an Amended Complaint [doc. #19] on March15, 2004. The two-count complaint alleges: breach of contract forfailing to assist the plaintiff in obtaining floor plan financingand failing to approve the sale of the dealership to Crowley; and violations of the Connecticut Franchise Act, Conn.Gen. Stat. § 42-133v, for failing to act in good faith interminating the contract, failing to give proper notice of thetermination,5 and refusing to approve the sale. On March25, 2004, GM filed an Amended Answer and Counterclaim [doc. #20].The counterclaim alleges that Plaintiff breached the dealershipagreement by: failing to maintain floor plan financing enablingthe dealership to purchase new vehicles from General Motors forresale to customers; becoming insolvent; and failing to conductcustomary sales and service operations. GM also moves for summaryjudgment on its counterclaim that plaintiff should be denied theprotections afforded by § 42-133v(g) of the Connecticut franchisestatute and should be held liable for defendants' attorney feesbecause the litigation was brought in bad faith.

III. STANDARD

Summary judgment is appropriate under Federal Rule of CivilProcedure 56(c) when the moving party establishes that there isno genuine issue of material fact to be resolved at trial andthat the moving party is entitled to judgment as a matter of law.See Celotex Corp. v. Catrett, 477 U.S. 317 (1986).Materiality is determined by the substantive law that governs the case.Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Inthis inquiry, "[o]nly disputes over facts that might affect theoutcome of the suit under the governing law will properlypreclude the entry of summary judgment." Id. "Where the recordtaken as a whole could not lead a rational trier of fact to findfor the nonmoving party, there is no genuine issue for trial."Matsushita Elec. Indus. Co. v. Zenith Radio Corp.,475 U.S. 574, 586 (1986).

In moving for summary judgment against a party who will bearthe ultimate burden of proof at trial, the movant's burden ofestablishing that there is no genuine issue of material fact indispute will be satisfied if it can point to an absence ofevidence to support an essential element of the non-movingparty's claim. Celotex, 477 U.S. at 322-23. "A defendant neednot prove a negative when it moves for summary judgment on anissue that the plaintiff must prove at trial. It need only pointto an absence of proof on plaintiff's part, and, at that point,plaintiff must `designate specific facts showing that there is agenuine issue for trial.'" Parker v. Sony Pictures Entm't,Inc., 260 F.3d 100, 111 (2d Cir. 2001) (quoting Celotex,477 U.S. at 324); see also Gallo v. Prudential ResidentialServs., 22 F.3d 1219, 1223-1224 (2d Cir. 1994) ("the movingparty may obtain summary judgment by showing that little or noevidence may be found in support of the nonmoving party's case."). The nonmovingparty, in order to defeat summary judgment, must come forwardwith evidence that would be sufficient to support a jury verdictin his or her favor. Anderson, 477 U.S. at 249 ("there is noissue for trial unless there is sufficient evidence favoring thenonmoving party for a jury to return a verdict for that party").In making this determination, the Court draws all reasonableinferences in the light most favorable to the party opposing themotion. Matsushita, 475 U.S. at 587. However, a party opposingsummary judgment "may not rest upon the mere allegations ordenials of the adverse party's pleading," Fed.R.Civ.P. 56(e),and "some metaphysical doubt as to the material facts" isinsufficient. Id. at 586 (citations omitted).

IV. DISCUSSION

A. Breach of Contract

Miller has alleged that GM breached the dealership contract intwo ways: failing to assist Miller in obtaining floor planfinancing; and failing to approve the sale of Chic Miller'sChevrolet to Kenneth Crowley.

1. Floor Plan Financing

"Where the language of the contract is unambiguous, andreasonable persons could not differ as to its meaning, thequestion of interpretation is one of law to be answered by thecourt." Hunt Ltd. v. Lifschultz Fast Freight, Inc., 889 F.2d 1274, 1277 (2d Cir. 1989) (quoting Rothenberg v. Lincoln FarmCamp, Inc., 755 F.2d 1017, 1019 (2d Cir. 1985)). "Contractlanguage is not ambiguous if it has a definite and precisemeaning, unattended by danger of misconception in the purport ofthe [contract] itself, and concerning which there is noreasonable basis for a difference of opinion." Id. (internalcitation omitted).

Here, the Dealer Sales and Service Agreement is unambiguous.Article 10.2, entitled "Wholesale Floorplan," provides that"Dealer agrees to have and maintain a separate line of credit . . .available to finance the Dealer's purchase of newvehicles. . . ." (emphasis supplied). This language places theresponsibility on the dealer, not on GM or any other party, toobtain and maintain a floor plan lending arrangement. Noobligations on the part of GM are mentioned anywhere in thearticle.

Miller argues, however, that two provisions of Article 5,entitled "Dealer's Responsibility to Promote, Sell, and ServiceProducts," obligate GM to assist him with finding floor planfinancing. Section 5.3, captioned "Customer Satisfaction,"requires the Dealer to generally act in a way that satisfies GMcustomers, and then provides that "General Motors agrees toprovide Dealer with reasonable support to assist Dealer'sattainment of customer satisfaction." It continues by laying outa process by which GM will evaluate customers' satisfaction concerning each dealer. Ragsdale Aff. Ex. A at 7.

Section 5.4, entitled "Business Planning," reads: General Motors has established a business planning process to assist dealers. Dealer agrees to prepare and implement a reasonable business plan if requested by General Motors. General Motors agrees to provide Dealer with information specific to its dealership, and if requested, to assist Dealer in its business planning as agreed upon by Dealer and General Motors."Id. (emphasis supplied).

The plain language of Sections 5.3 and 5.4 shows them to beinapplicable to the issue of floor plan financing. First, nothingin Section 5.3 connects general concerns about "customersatisfaction" to the specific requirement that a dealer maintainfloor plan financing. While customers might be dissatisfiedshould they not find a range of new vehicles available at thedealership, due to the dealership's inability to purchase newvehicles from GM, the issue of floor plan financing is addressedspecifically in Section 10.2. It "is a fundamental rule ofcontract construction that `specific terms and exact terms aregiven greater weight than general language.'" Aramony v. UnitedWay of Am., 254 F.3d 403, 413 (2d Cir. 2001) (quotingRestatement (Second) of Contracts § 203(c) (1981)). Thus thegeneral obligation of GM to "provide Dealer with reasonablesupport to assist Dealer's attainment of customer's satisfaction"cannot be read as a specific requirement that GM assist a dealerin obtaining a floor plan line of credit where anothercontractual section expressly references only the dealer's agreed undertakingto obtain and maintain the requisite credit line.

Similarly, GM's agreement in Section 5.4 to help the Dealerwith business planning does not apply to the issue of floor planfinancing. The language of the section itself does not mentionfloor plan financing or include it specifically as part of abusiness plan. While floor plan financing generally could be partof a dealer's business plan, floor plan loans are specificallyaddressed in Section 10.2, which places the responsibility on thedealer, not GM, to obtain and maintain the required creditarrangement. The general obligation of GM "to assist Dealer inits business planning," see Section 5.4, does not negate thespecific contractual obligation of the dealer to "have andmaintain a separate line of credit . . . available to finance theDealer's purchase of new vehicles . . ." under Section 10.2.

Plaintiff argues that even if there is nothing in the languageof the contract that obligated GM to assist him in obtainingfloor plan financing, GM should have done so because it had doneso in the past for other dealers and it had the ability to do so,as it could have pressured GMAC, its wholly owned subsidiary, toextend a loan.6 Where the contract itself is unambiguous, the contract's "meaning must be determined from thefour corners of the instrument without resort to extrinsicevidence of any nature," Goodheart Clothing Co. v. Laura GoodmanEnter., Inc., 962 F.2d 268, 272 (2d Cir. 1992), such as "tradecustom and usage," which "is not admissible to contradict orqualify [the] provisions" of an unambiguous contract. Hunt,889 F.2d at 1277-78 (internal citations omitted). Therefore even ifPlaintiff can demonstrate that GM had the ability to assistdealers in obtaining financing from GMAC and had done so in thepast, that evidence is not admissible to modify what the writtendealership contract obligated Plaintiff to do.

Miller further alleges that one reason he was unable to obtainfloor plan financing is that GMAC was "`punishing' [him] forhaving used Chase Bank for a period of time" and that "GMACmanagers also encouraged other lenders to avoid working with[him]." Miller Aff. ¶ 20. Miller does not provide any admissibleevidentiary support for these allegations beyond the fact thatPlaintiff used to use GMAC for its floor plan financing but switched to Chase for more advantageous terms. GMAC is not adefendant in this action, so even if Miller's assertions aboutGMAC's animus could be proved, its motivation for not lending toPlaintiff is not probative of whether Defendant GM acted in badfaith.

Therefore, the Court finds that there is no dispute of materialfact concerning Chic Miller's lack of floor plan financing afterNovember 2002. Article 10.2 of the dealership contractunambiguously places the burden on the dealer to find andmaintain floor plan financing. Without floor plan financing, theplaintiff was in clear breach of Section 10.2 of the dealershipcontract, justifying GM's termination of the contract underSection 13.1.11 (GM may terminate contract for "[f]ailure ofdealer to maintain the line of credit required by Article 10.").GM is entitled to judgment as a matter of law on its counterclaimon that basis and on the plaintiff's breach of contract claiminsofar as it is based on GM's alleged failure to assistplaintiff in obtaining a floor plan.

2. Sale of Dealership to Crowley

Plaintiff also bases his breach of contract claim on GM'sindication that it would refuse to approve the sale of ChicMiller's Chevrolet to Kenneth Crowley. The sale was proposed inFebruary 2004, two months after Chic Miller's commenced thislawsuit, one month after GM asserted its counterclaim, and, more importantly, after GM terminated the dealership contract December15, 2003.7 Ragsdale Aff. Ex. H. The Court has previouslyfound that GM's May 14, 2003 termination notice was justifiedbecause Chic Miller's Chevrolet breached the franchise contractby failing to maintain floor plan financing.

Thus at the time the Crowley sale was proposed, Miller nolonger had a franchise to transfer to Crowley.8 "It is ageneral principle of contract law that an assignment operates totransfer to the assignee only those rights and interestspossessed by the assignor." See Glenn v. Exxon Co., U.S.A.,801 F. Supp. 1290, 1297 (D. Del. 1992) (citing Restatement(Second) of Contracts § 336, comment b (1981)) (emphasis inoriginal). Therefore, "if a franchisor has established thenecessary grounds and followed the required procedures, once thefranchise is terminated the franchisee cannot sell the franchise,unless the parties have so agreed." Auth. Foreign CarSpecialists v. Jaguar Cars, Inc., No. 92-3760(HLS), 1994 U.S.Dist. Lexis 10631 at *10 (D.N.J. Feb. 28, 1994) (unpublished), aff'd 79 F.3d 1137 (3d Cir.1994).9 In Authorized Foreign Car Specialists, underfacts similar to the instant case, a franchisee attempted to sellits car dealership to a successor dealer eight days after theeffective date of a termination notice from the franchisor.Because the franchisee no longer had anything to sell, thefranchisor was found not to have breached the dealershipagreement by refusing to approve the transfer. Id. Here,Miller's franchise was terminated at the time he applied totransfer the franchise, so Miller had nothing left to transferand GM could not be found to have breached the dealershipcontract by failing to approve the sale.

For the reasons above, GM is entitled to judgment as a matterof law on the plaintiff's breach of contract claim insofar as theclaim is based on GM's indication that it would not approve thesale of the dealership to Crowley.

B. Connecticut Franchise Statute

In order to lawfully terminate a franchise under theConnecticut dealer statute, a franchisor must: provide noticethat complies with statutory requirements; have "good cause" for the termination; and act "in good faith." Conn. Gen. Stat. §42-133v(a);10 see also Richard Subaru, Inc. v. Subaruof New England, 8 F. Supp. 2d 164, 169 (D. Conn. 1998).

"Good cause" exists if "[t]here is a failure by the dealer tocomply with a provision of the franchise which is both reasonableand of material significance to the franchise relationship . . ."Conn. Gen. Stat. § 42-133v(b). According to James Ragsdale,Northeast Region Zone Manager for GM, floor plan financing is amaterial aspect of a dealership agreement because "without floorplan financing, a dealership is unable to purchase motor vehicleinventory, which, in turn, severely limits a dealership's abilityto earn income from vehicle sales." Ragsdale Aff. ¶ 7. "If adealership is without floor plan financing for an extended periodof time, it will eventually lose its ability to generate revenuesand become financially insolvent, and will not be able to conductcustomary sales and service operations." Id. at ¶ 8. Millerdoes not dispute that floor plan financing is a material term ofhis franchise contract with GM. As discussed above, GM wasjustified under the contract in terminating Miller's franchise for failure to maintain floorplan financing. Because that term is material to the agreement,GM had "good cause" under the Connecticut dealer statute forterminating the franchise because of Miller's uncuredbreach.11

GM also had good cause to terminate the contract because it hasshown that Chic Miller's Chevrolet failed to conduct customarysales and service operations between March 1 and March 8, 2004. Asign posted on the door of the dealership during that timestated: "CHIC MILLER'S CHEVROLET IS CLOSED. Please bring yourvehicle to the dealer of your choice. Thank you for your pastpatronage." Ragsdale Aff. ¶ 41, Ex. O. Although Miller assertsthat the dealership was only temporarily closed for repair, thesign does not say that the dealership would reopen, and thephrases "bring your vehicle to the dealer of your choice" and"thank you for your past patronage" certainly suggest permanentclosure, not a burst water pipe. Miller points to one newspaperadvertisement for body work business on March 8, 2004 and one car sale on April 14, 2004, see Miller Aff. ¶ 29, 40,during the time he claims he was open and operating his business.This evidence vastly is insufficient to show the conduct ofregular, customary sales and service operations, which is amaterial part of the franchise agreement, and Section 14.5.3 ofthe dealership contract permits GM to terminate the agreement for"[f]ailure of the Dealer to conduct customary sales and serviceoperations during customary business hours for seven consecutivebusiness days." Ragdsdale Aff. Ex. A at 21. Since that term ismaterial to the agreement, GM had "good cause" under theConnecticut dealer statute for terminating the franchise becauseof Plaintiff's breach.

Chic Miller's Chevrolet alleges that by "prematurely seekingthe ultimate remedy of termination of the dealership franchise,the Defendant has not acted in good faith. . . ." Amended Compl.[doc. #19] ¶ 40. The undisputed record shows that GM extended theperiod several times for Miller to try to obtain replacementfloor plan financing after his arrangement with Chase ended. GMfirst notified Plaintiff of its breach of the dealership contracton December 20, 2002, with an amended notice on January 2, 2003,see Ragsdale Aff. Ex. D, and under the terms of the contract itcould have canceled the franchise after 30 days of that notice.However, on March 7, 2003, GM extended the deadline until March31, and when Miller was still unable to find a lender, GM gave him another extension until July 1. Id. at Ex. G, H. GM alsoprepared two letters at the request of Chic Miller's counselstating that the dealership would be in good standing with GMupon reinstatement of its floor plan financing arrangement. Id.at Ex. E, F. While Miller may have expected, based on GM's pastpractices, more than GM provided to him, Miller has not offeredevidence to show that GM was acting "prematurely" or in bad faithduring the course of the dealings recounted above.

Plaintiff argues that GM was acting in bad faith because of its"grand plan to reduce the market place [in the Bristol area] fromthree to two [Chevrolet] dealers." Pl. Opp. to Def. Motion forSummary Judgment [doc. #31] at 12. However, a long term plan thatcalled for reducing the number of dealerships in a possiblyoversaturated market is not alone evidence of bad faith.

Because Plaintiff has not offered evidence from which afactfinder could conclude that GM acted without good cause orgood faith,12 GM is entitled to judgment as a matter oflaw on Plaintiff's claims under the Connecticut Franchise Act.

Defendant further asserts that Plaintiff is not entitled to thesix month grace period under the Franchise Act. See Conn. Gen. Stat. § 42-133v(g).13 The statute provides that thefiling of a lawsuit challenging the termination of a franchisetolls the effective date of the termination for six months afterthe court's judgment, with several exceptions, including: (A) Insolvency of the dealer, or filing of any petition by or against the dealer under any bankruptcy or receivership law; (B) failure of the dealer to conduct customary sales and service operations during business hours for seven consecutive business days, except in circumstances beyond the direct control of the dealer . . .Conn. Gen. Stat. § 42-133v(d)(3).

As discussed supra, GM has shown that Chic Miller's Chevroletfailed to conduct customary sales and service operations forseven consecutive business days between March 1 and March 8,2004.14 For this reason Plaintiff is not entitled to the six month grace period provided in Conn. Gen. Stat. §42-133v(g). The six month safe harbor is intended to allow afranchisee to continue to operate or transfer a viable franchiseduring and after a legal dispute, so the safe harbor logicallywould not apply to a franchise that has gone out of business.Thus Chic Miller's Chevrolet is not entitled to the safe harborof § 42-133v(g).

C. Attorney Fees

GM argues that it is entitled to costs and attorney feesincurred in connection with defending this lawsuit becausePlaintiff filed it in bad faith and solely for the purpose ofdelay.15 Although the Court has found that GM is entitledto summary judgment on both claims in Plaintiff's complaint, GMhas not shown that the complaint was made totally in bad faith.

Based on his previous course of dealing with GM over 40 yearsand his knowledge of GM's treatment of and assistance to otherestablished dealerships, Miller cannot be said to have had nobasis for claiming that GM's intolerance of his breach was a badfaith method for accomplishing its business goals of eliminatingone dealership — a belief remotely supported by a 1998 statement of GM area manager Prestoy — or that GMAC's animuscould be attributable to GM, even though Plaintiff ultimatelycould not marshal evidence to elevate these claims beyond meremetaphysical belief. A party may be sanctioned for filing ameritless lawsuit solely for the purpose for delay, and theConnecticut Franchise Statute's six month grace period after thedisposition of a lawsuit could be used as a vehicle for delay.However, although the Court has determined that Miller is notentitled to the grace period, the Court cannot find that filingsuit to preserve the status quo to test his bad faith claim,while without merit, was so abjectly lacking in any arguablebasis to justify the significant sanctions sought. Therefore,GM's motion for attorney fees is denied.

V. CONCLUSION

For the foregoing reasons, Defendant's Motion for SummaryJudgment [doc. #22] is GRANTED as to both counts of Plaintiff'scomplaint and Defendant's counterclaim under Conn. Gen. Stat. §42-133v(g), but denied as to the request for attorney fees.Defendant's request for oral argument [doc. #27] is DENIED ASMOOT. The Clerk is directed to close this case.

IT IS SO ORDERED.

1. GM asserts, and Plaintiff does not dispute, that partiesthen agreed that the effective date of termination of thecontract was December 15, 2003. Ragsdale Aff. ¶ 21.

2. Section 14.5.3 of the contract permits GM to terminate theagreement for "Failure of Dealer to conduct customary sales andservice operations during customary business hours for sevenconsecutive business days." Ragsdale Aff. Ex. A at 21.

3. A sign posted on the door on March 1, 2003, stated: "CHICMILLER'S CHEVROLET IS CLOSED. Please bring your vehicle to thedealer of your choice. Thank you for your past patronage."Ragsdale Aff. ¶ 41, Ex. O.

4. Section 5.1.6 of the dealership contract provides: "Dealeragrees to advertise and conduct promotional activities that arelawful and enhance the reputation of Dealer, General Motors andits Products. . . ." Ragsdale Aff. Ex. A at 6.

5. Although plaintiff asserts an improper notice claim in hiscomplaint, he has not briefed it in his Opposition to GM's Motionfor Summary Judgment [doc. #31] and the Court deems this claimabandoned.

6. The only references in the record concerning therelationship between GM and GMAC are Plaintiff's assertion that"General Motors Corporation has a substantial level of authorityand ability to influence GMAC's decision making process on behalfof its dealers," "[GM] has traditionally given significantassistance to established dealers, including assistance insecuring floor plan financing," and "one of the fundamentalpurposes for the existence of GMAC is to provide [floor plan]financing for GMC dealers," Miller Aff. ¶¶ 16-17, and Defendant'sallegation that GMAC is "a separate corporation" independent ofGM. See Defendant's Amended Answer ¶ 12 et seq. Any factualdispute inferable from these statements is not material, however,because the contract did not obligate GM to assist Miller inobtaining a floor plan even if it could have done so.

7. See supra n. 1. The undisputed date of December 15,2003 precedes Miller's application to transfer the franchise toCrowley.

8. Although the Connecticut Franchise Act, Conn. Gen. Stat. §42-133v(g), allows a dealer to sell or transfer a franchise forup to six months after the conclusion of litigation under somecircumstances, Plaintiff does not meet the criteria for this safeharbor provision. See infra, § IV.B.

9. Even if termination has not yet taken effect, a franchiseeis only entitled to transfer his interest in any periodremaining. Glenn, 801 F. Supp. at 1297 (where plaintiffattempted to transfer gas station franchise after notice oftermination but before expiration of 90 day notice period,plaintiff entitled to transfer only remaining days in thatperiod); see also Portaluppi v. Shell Oil Co., 869 F.2d 245(4th Cir. 1989).

10. "Notwithstanding the terms, provisions or conditions ofany franchise agreement and notwithstanding the terms orprovisions of any waiver, no manufacturer or distributor shallcancel, terminate or fail to renew any franchise with a licenseddealer unless the manufacturer or distributor has satisfied thenotice requirement of subsection (d) of this section, has goodcause for cancellation, termination or nonrenewal and has actedin good faith." Conn. Gen. Stat. § 42-133v(a).

11. Although the Connecticut state courts have yet tointerpret the Connecticut "good cause" requirement, failure tomaintain floor plan financing was held to be good cause forterminating a car dealership under the Maryland franchisestatute, which is similar to Connecticut's. Hale Trucks of Md.v. Volvo Trucks N. Am., 224 F. Supp. 2d 1010, 1028 (D. Md.2002), interpreting Md. Code Ann., Transp. II, § 15-209(b) (2001)("A distributor may not terminate, cancel, or fail to renew thefranchise of a dealer, notwithstanding any term or provision ofthe franchise, unless: The dealer has failed to complysubstantially with the reasonable requirements of thefranchise. . .").

12. Plaintiff's complaint asserts that GM "failed to complywith the notice provisions of the Connecticut Franchise Act,"Amended Compl. ¶ 35, but Plaintiff has not briefed the issue andthe Court deems it abandoned. See supra n. 5.

13. "If a franchisee brings an action in a court of competentjurisdiction to challenge the cancellation, termination ornonrenewal of a franchise agreement by a manufacturer ordistributor under this section, such franchise agreement shallremain in full force and effect and such franchisee shall retainall rights and remedies pursuant to the terms and conditions ofsuch franchise agreement, including, but not limited to, theright to sell or transfer such franchisee's ownership interest,for a period of six months following a final determination by thecourt of competent jurisdiction, unless extended by the court ofcompetent jurisdiction for good cause. This subsection shall notapply to a cancellation, termination or nonrenewal of a franchiseagreement based upon any of the reasons set forth in subdivision(3) of subsection (d) of this section" [quoted in text above].Conn. Gen. Stat. § 42-133v(g).

14. Although GM also asserts that Chic Miller's Chevrolet wasinsolvent, the Mollo affidavit arguably contradicts thisallegation, see Mollo Aff. ¶ 6, and the Court's decision doesnot rest on this basis.

15. GM asserts in its summary judgment papers that Rule 11 ofthe Federal Rules of Civil Procedure also entitles it to attorneyfees. GM Mem. of Law in Support of Motion for Summary Judgment[doc. #23] at 24. However, a "motion for sanctions under [Rule11] shall be made separately from other motions or requests,"Fed.R.Civ.P. 11(c)(1)(A), and therefore is improperly broughtas part of Defendant's summary judgment motion.

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