DaimlerChrysler Motors Co., LLC v. Manuel
2012 Tex. App. LEXIS 1489
| Tex. App. | 2012Background
- Chrysler and Manuel entered Project 2000 realignment with waivers from most dealers; Manuel refused to sign initially.
- Two key agreements were signed Aug 31, 1999: Settlement Agreement (payment to Manuel and waiver of protest rights) and the Agreement to Enter into Sales & Service Agreement (AESSA) creating a new South Arlington Chrysler-Jeep dealership.
- AESSA required Chrysler to use its best efforts to litigate or settle Meador’s protest to allow timely dealership opening.
- Meador Chrysler-Plymouth protested the South Arlington dealership, triggering regulatory stay and delaying Manuel’s project.
- Manuel opened the South Arlington dealership in February 2002 after Meador’s protest was settled; trial court awarded Manuel damages for the delay but denied attorney’s fees.
- The trial court held Chrysler breached the best‑efforts clause and awarded Manuel $370,668.50 plus prejudgment interest; Chrysler appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Enforceability of Best Efforts clause | AESSA requires best efforts with a measurable timeline. | Best efforts are too vague and no deadline existed; performance met the goal. | Best efforts clause is enforceable with a measurable goal and time frame. |
| Damages limitation vs. actual damages | Settlement and AESSA permit recovery of actual damages including lost profits. | Damages limited to out-of-pocket expenses; lost profits barred. | Contracts construed together; actual damages recoverable; lost profits allowed as damages. |
| Reliability of lost-profits testimony | Yardstick and planning-potential methods are industry-standard and reliable. | Methodology and data reliability questioned; Daubert standards argued. | Testimony admitted; methodologically reliable under applicable standards. |
| Prejudgment interest accrual date | Interest should accrue from earliest claim notice of breach under applicable rule. | Correct accrual date is June 9, 2004; earlier notice pertained to a different claim. | Accrual date June 9, 2004; prejudgment interest adjusted accordingly. |
| Attorney's fees (trial and appellate) | Section 38.001 fees mandatory; Michigan law not controlling; fees recoverable. | AESSA limits damages and may bar fees; segregation issue. | Trial and appellate fees remanded for segregation and calculation; fees may be recoverable. |
Key Cases Cited
- CKB & Assocs., Inc. v. Moore McCormack Petroleum, Inc., 809 S.W.2d 577 (Tex.App.-Dallas 1991) (best efforts with missing goals measured by reasonable diligence; guidelines required when no fixed time)
- Herrmann Holdings, Ltd. v. Lucent Technologies, Inc., 302 F.3d 552 (5th Cir. 2002) (no fixed date required; ‘best efforts’ may be breach when timely action is necessary)
- Cherokee Cnty. Cogeneration Partners, L.P. v. Dynegy Mktg. & Trade, 305 S.W.3d 309 (Tex.App.-Houston [14th Dist.] 2009) (lost profits can be direct or consequential depending on contract language and foreseeability)