Priority Auto Group, Inc. v. Ford Motor Company
757 F.3d 137
4th Cir.2014Background
- Kimnach Ford granted Ford ROFR in the dealership sale; Priority Auto sought to purchase, Ford declined and exercised ROFR, later assigning to a third party.
- Priority Auto alleged Ford violated Virginia Code § 46.2-1569.3a by imposing an unlawful condition and asserted tortious interference with contract and business expectancy.
- District court dismissed on Rule 12(c) grounds; court held Priority Auto lacked statutory standing and tort claims failed as a matter of law.
- Virginia law governs, applying Virginia’s Motor Vehicle Franchise Act and related tort standards in the diversity-district context.
- Subdivision 3a prohibits imposing a condition on sale if it would violate the title; but it provides an exception: an exercise of ROFR under § 46.2-1569.1 is not a prohibited condition.
- The only relief for prospective buyers under § 46.2-1569.1(4) is reasonable expenses; Priority Auto had already received that relief.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does Priority Auto have standing under § 46.2-1569.3a? | Priority Auto so argues because Ford’s ROFR constitutes a prohibited condition. | ROFR exercise is exempt from being a prohibited condition under § 46.2-1569.3a. | No standing; ROFR exercise cannot be challenged under § 46.2-1569.3a. |
| Are Priority Auto’s tort claims viable given a lawful ROFR exercise? | Ford’s ROFR was improper due to inadequate consideration and purpose to thwart the sale. | Lawful ROFR exercise cannot constitute improper methods in tortious interference. | Tort claims fail as a matter of law; lawful ROFR exercise is not an improper method. |
Key Cases Cited
- Small v. Fed. Nat'l Mortg. Ass'n, 747 S.E.2d 817 (Va. 2013) (statutory standing requires a legal right to sue under the statute)
- Antisdel v. Ashby, 688 S.E.2d 163 (Va. 2010) (utilize plain statutory language when unambiguous)
- Jones v. Conwell, 314 S.E.2d 61 (Va. 1984) (parsimony in statutory interpretation; give effect to related statutes)
- Fivebaugh v. Whitehead, 559 S.E.2d 611 (Va. 2002) (right of first refusal is for the benefit of the party granted it)
- Charles E. Brauer Co. v. NationsBank of Va., N.A., 466 S.E.2d 382 (Va. 1996) (threat to perform a legally entitled act is not unlawful interference)
- Lewis-Gale Med. Ctr., LLC v. Alldredge, 710 S.E.2d 716 (Va. 2011) (improper methods requirement for tortious interference)