United States District Court, D. Minnesota
MEMORANDUM AND ORDER
A. Magnuson United States District Court Judge
matter is before the Court on Defendant's Motion for
Summary Judgment. For the following reasons, the Motion is
Clark Equipment Co. d/b/a Bobcat Co. (“Bobcat”)
manufactures and sells compact equipment, which it
distributes to consumers through a network of independently
owned dealers. (Ross Aff. (Docket No. 27) at 2-3.) Bobcat
maintains one-year dealer agreements with its independent
dealers, who sell Bobcat products directly to consumers.
(Id. at 3-4.) Its dealer agreements include two
provisions relevant to this lawsuit. The first provision
prohibits a dealer from assigning or transferring the dealer
agreement without Bobcat's prior written consent.
(Id. (Docket No. 29) Ex. 1 ¶ 16.) The second is
a right-of-first-refusal provision, which gives Bobcat the
right to buy a dealership first if the dealer receives an
offer from another prospective buyer that it is willing to
accept. (Id. ¶ 21.)
2000, Plaintiff Bobcat of Duluth, Inc. (“Bobcat of
Duluth”), has been one of Bobcat's independent
dealers and in that capacity has signed Bobcat's annual
dealer agreements. (Holland Decl. (Docket No. 34-3) Ex. 3 at
3-4.) From 2000 to 2002, Bobcat of Duluth exclusively sold
Bobcat equipment. (Id. at 4.) In 2002, a Bobcat
representative recommended that Bobcat of Duluth also sell
equipment manufactured by Kubota Tractor Corporation to
supplement its Bobcat sales. (Id.) Kubota maintains
product lines that compete with Bobcat. (Ross Aff. at 4.)
Since 2002, Bobcat of Duluth has sold both Bobcat and Kubota
2012, Bobcat implemented a policy of exclusivity by requiring
its new dealers to sign a dealer agreement that prohibited
the sale of products that compete with Bobcat's product
lines. (Holland Decl. (Docket No. 34-1) Ex. 1 at 9-12.) This
exclusivity policy was not reflected in Bobcat's annual
dealer agreements with Bobcat of Duluth, and in 2013, Bobcat
of Duluth added two Kubota products that compete with
Bobcat's products. (Id. at 17-18; Ross Aff. at
4.) Bobcat of Duluth claims that it was not aware of this
policy until it attempted to sell its dealership.
December 5, 2014, the president of Bobcat of Duluth, Matthew
Mahoney, notified Bobcat that he intended to sell his
business. (Ross Aff. at 5.) Bobcat responded by stating that
it would require any prospective buyer to sell only Bobcat
product lines as a condition of its approval and consent.
(Id. (Docket No. 28-1) Ex. 3.) Consequently, it
suggested that Bobcat of Duluth should sell the Bobcat
portion of its dealership separate from the Kubota portion.
November 2015, Bobcat of Duluth identified a prospective
buyer, Quality Forklift Sales and Service, Inc.,
(“Quality Forklift”). Quality Forklift was
interested in purchasing the dealership, but it wanted to buy
both the Bobcat and the Kubota businesses. (Gleekel Aff.
(Docket No. 26-1) Ex. B.) Bobcat of Duluth forwarded to
Bobcat a copy of Quality Forklift's non-binding letter of
intent (“LOI”) to purchase the dealership for
$2.3 million, as well as information about Quality Forklift,
and requested Bobcat's consent to sell Bobcat of Duluth
to Quality Forklift and transfer the dealer agreement.
(Holland Decl. (Docket No. 34-4) Ex. 4.)
December 7, 2015, after reviewing the business plan and
conditionally approving the transfer, Bobcat sent a letter
and new dealer application to Quality Forklift. (Ross Aff.
(Docket No. 28-1) Ex. 5 at 2-3). The letter set out certain
requirements to purchase the dealership and transfer the
dealer agreement, including that Quality Forklift must (1)
sign a new dealer agreement that contained exclusivity
provisions, (2) not sell any competitive attachments with
Bobcat equipment, (3) achieve specific market share
commitments as specified in Quality Forklift's business
plan, (4) have at least 50% Bobcat equipment in its rental
fleet, and (5) agree that Bobcat may terminate the dealer
agreement if Quality Forklift fails to cure any breach of
these requirements within 60 days. (Id.) Three days
later, Quality Forklift responded by modifying or omitting
these conditions. (Holland Aff. (Docket No. 34-6) Ex. 6.)
Quality Forklift would only agree to (1) sign a dealer
agreement consistent with Bobcat of Duluth's existing
dealer agreement, (2) “use its best efforts to increase
market share commitments, ” (3) “have a rental
fleet of Bobcat equipment, ” and (4) “resolve in
good faith” any breaches in requirement “in a
timely manner.” (Id.) Based on Quality
Forklift's unwillingness to agree to its conditions,
Bobcat withheld consent to approve the dealership transfer.
(Ross Aff. Ex. 7.)
then sought prospective buyers to purchase the Bobcat and
Kubota businesses separately. Quality Forklift offered $525,
000 for the Kubota business. (Holland Aff. (Docket Nos. 34-7.
34-8) Exs. 7, 8.) And two other existing Bobcat dealers
offered to buy Bobcat of Duluth's Bobcat business.
Tri-State Bobcat “offered in the 500 range” and
Mahoney recalled that Bobcat of Grand Forks offered less than
Tri-State. (Mahoney Dep. (Docket No. 34-3) at 139-40, 189.)
Tri-State also made a verbal offer to buy the dual-brand
dealership for $2.3 million and divest itself of the Kubota
business within three years. (Id. at 132-33.) Bobcat
withheld its consent for this proposal.
of Duluth then filed this lawsuit, arguing that Bobcat
imposed unreasonable conditions on the transfer of its dealer
agreement, which allegedly reduced the potential purchase
price from $2.3 million to $1, 025, 000. Counts I and II of
the Complaint allege that Bobcat violated the Minnesota Heavy
and Utility Equipment Manufacturers and Dealers Act
(“MHUEMDA”), Minn. Stat. § 325E.0681, and
the Minnesota Agricultural Equipment Dealers Act
(“MAEDA”), Minn. Stat. § 325E.062. (Compl.
(Docket No. 1) ¶¶ 48-73.) Count III contends that
Bobcat breached the terms of its dealer agreement.
(Id. ¶¶ 74-83.) Count IV seeks declaratory
relief against Bobcat. (Id. ¶¶ 84-87.)
Bobcat moves for summary judgment.
judgment is proper if there are no disputed issues of
material fact and the moving party is entitled to judgment as
a matter of law. Fed.R.Civ.P. 56(a). The Court must view the
evidence and inferences that “may be reasonably drawn
from the evidence in the light most favorable to the
nonmoving party.” Enter. Bank v. Magna Bank of
Mo., 92 F.3d 743, 747 (8th Cir. 1996). The moving party
bears the burden of showing that there is no genuine issue of
material fact and that it is entitled to judgment as a matter
of law. Celotex Corp. v. Catrett, 477 U.S. 317, 323
(1986). A party opposing a properly supported motion for
summary judgment may not rest on mere allegations or denials,
but must set forth specific facts in the record showing that
there is a genuine issue for trial. Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 256 (1986).