Johnson v. Coss

667 N.W.2d 701 (2003)

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Nature of the Case

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Facts

P and D entered into an Asset Purchase Agreement for the sale of Johnson Ford Lincoln Mercury, Inc. The agreement was expressly conditioned upon Ford Motor Company's approval of the transfer of the Ford franchise from P to D. Ford identified several requirements that D needed to satisfy before Ford would approve the transfer. Those requirements included an onsite manager that was approved by Ford. That manager was required to demonstrate, to Ford's satisfaction, the ability to operate a dealership successfully. The manager was also required to own a substantial interest in the business. Mark Goodrich was identified as such a manager/co-owner. Ford also required that the potential owners develop a New Dealer Operating Plan and that each owner submit personal and financial information. Ford further advised that it would require an initial capitalization of $1.476 million instead of the $1 million D had initially proposed. Despite D's attempts to comply with these requirements, D could not meet them. D sent letters to Ford and P informing them that, because D could not meet Ford's requirements, the agreement was null and void under paragraph 16.P commenced this action. P filed a motion for partial summary judgment on Count 1 (breach of contract) and Count 2 (breach of the covenant of good faith and fair dealing). D filed a cross-motion for summary judgment. After a hearing, the circuit court granted partial summary judgment in favor of P and denied judgment for D. D appealed. D argues that he made sufficient efforts to obtain Ford's approval, but that it became apparent he could not meet all of Ford's requirements.