Question: Chic Miller operated a General Motors GM franchise car dealership

Chic Miller operated a General Motors (GM) franchise car dealership. His written franchise agreement with GM stipulated that Miller had to maintain a floor-plan financing agreement with a lender to enable him to buy new cars from GM. Initially, Miller maintained a line of credit with a GM affiliate (GMAC), but he terminated the agreement because he felt that GMAC charged him an exorbitant interest rate. Miller was able to find another line of credit from Chase Manhattan Bank, but Chase withdrew its financing agreement with Miller after one year. Miller attempted to resume the agreement with GMAC, but GMAC refused. Miller alleged ipse dixit (an assertion without evidence) that GMAC discouraged other lenders from providing a line of credit to Miller. GM then notified Miller that it was terminating its franchise relationship with him because he failed to satisfy the financing stipulation of the written franchise agreement. Two months after receiving this notice from GM, Miller attempted to sell his franchise to Kenneth Crowley, the owner of another car dealership. GM rejected this sale, alleging that Miller no longer had a franchise to sell because GM had terminated the franchise agreement two months earlier. Miller sued GM for failing to help his franchise obtain floor-plan financing and for rejecting the sale of his franchise to Crowley. How do you think the court ruled in this case? What requirements must GM meet to lawfully terminate a franchise? Did GM meet those requirements?

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  • CreatedOctober 21, 2015
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