*1 229 Termination of the Matter of the In the Agreement Between GRO
Franchise INTERNATIONAL, INC., In SETH Johnson, Brady, Miner of Reade & Celia Harvester. ternational Intern., Yankton, appellant, 15944, 15962.
Nos. Inc. Adam, May, B. Anderson of Robert Dakota. Supreme Court of South Pierre, appellee, Thompson, & Gerdes on Briefs March Considered Intern. Harvester. Decided June WUEST, Chief Justice. International, (Groseth), Inc. corporation, appeals Dakota a circuit
South granting petition court order of Inter- (IH) sought the national Harvester agreement termination of a franchise be- cir- tween it and Groseth. We affirm the cuit court’s decision. a franchised
Until Groseth was equipment dealer of IH farm located Yankton, In South Dakota. addition handling equipment, line of farm seth was also a franchised dealer of separate agreement. This trucks under a Agreement” “Dealer was en- Sales/Service parties tered October 1984, Tenneco, (Tenneco) Inc. and its (Case), subsidiary, Company nego J.I. Case purchase equipment of IH’s farm tiated division. IH became Navistar Internation and mar al and continued to manufacture heavy-duty ket medium- and trucks. Be was located in a “conflict and IH dealer area” which both Case existed, ships equipment its farm brought was terminated. Groseth then Case, against claiming suit Tenneco and losing damages associated with the fran Intern., chise. Tenne See Groseth Inc. v. co, Inc., N.W.2d Gro Inc., Intern., Tenneco, seth v. Inc. (S.D.1987). legal N.W.2d 159 issues previous related raised action are not to this from IH’s
This
stems
agreement
its truck franchise
terminate
sought
with Groseth.
termination of
agreement
because Groseth
with IH’s
refused
computerized
for a
communication
referred to as the “Dealer Communication
*2
Regulation, Divi-
ment
and
(DCN).
designed,
was
of Commerce
The DCN
Network”
Patrol,
Dealer
processing
Highway
of
Office of
manual
sion of
part, to eliminate
23,
January
more
provide
(Department)
and
economi-
Licensing
to
information
Department,
of communication
application
cal and efficient methods
the
1986. In its
to
IH and its dealers
between
hearing
between
to determine
requested
IH
a
Implementation of
dealers themselves.
the
ter-
could be
whether Groseth’s franchise
request
the
partially
at
the DCN
arose
provisions of SDCL ch.
under the
minated
DCN,
As a
the
IH franchisees.'
hearing
on March
a
was held
32-6A.1 Such
com-
required
was
to obtain a
each dealer
11,
held on
hearing
A
was
second
terminal,
the
display screen and
puter
a
recording appa-
8, 1986,
July
because the
computer hard-
necessary
The
software.
the
at the first
ratus used to make
record
through
compa-
purchased
could be
ware
Representing
hearing failed.
Groseth
designated by
through any other
ny
IH or
Gro-
hearing
Clifford and Carol
this
were
offering equipment
private vendor
They appeared
the assist-
seth.
without
compatible
the DCN.
was
with
legal counsel.
ance of
1983,
19,
IH
to its
September
sent
On
hearing, 727 of
At
of the second
the time
dealers, including Groseth, a memorandum
complied
IH’s
had
with the
734 dealers
requirements
the
described the
for
requirements.
DCN
Of the seven dealers
expected
sign a
All
to
DCN.
dealers were
complied,
new deal-
who
three were
had
ready
agreement
partic-
DCN
taking
meeting
steps
ers
were
toward
who
system
in the
six months of a
ipate
within
requirements
the
and three were dealers
representative of
meeting.”
“roll out
A
bankruptcy proceed-
who were involved
meeting
attended
Groseth
such
Sioux
course,
dealer,
ings.
seventh
was
The
Falls,
South Dakota on October
record
shows
Groseth. The
further
that
Although
initially signed
agree-
an
Groseth
function of which the DCN was
part of the
it
ment to become a
capable
hearing
time of
was
result,
subsequently failed to do so. As a
parts ordering. This
also could have
task
17, 1985,
May
its
IH notified Groseth on
accomplished by telephonic or written
been
to terminate Groseth’s franchise.
orders. The other services for
as its
IH cited
reason
designed,
ordering,
DCN
such as truck
was
inability
franchise Groseth’s
to communi-
submissions,
com-
warranty
customer
electronically
IH due to
cate
with
Groseth’s
plaints
general
communication between
failing
procure
necessary computer
among
IH
the dealers as well as
IH contended
hardware
software.
themselves,
in the devel-
dealers
were still
so
that Groseth’s failure to do
breached
opmental stages.
developmental pro-
This
provisions
agree-
certain
expected
cess
an additional
was
take
comply
ment. Groseth had refused to
fifteen months.
ex-
because
pense of the
its
because of
Department
determined that Groseth
litigation
pending
Tenneco and
Case had
not breached
Dealer Sales/Service
regarding
equipment
the farm
franchise. Agreement.
Depart-
Consequently,
petition seeking
ment
IH’s
dismissed
initially
IH
notified
that it
would
franchise, concluding
terminate Groseth’s
termination of the truck franchise if
seek
that IH failed to show
ter-
did not
re-
DCN
appealed
mination.
quirements
1985. This dead-
October
Thereafter,
decision
later
to March
court.
line was
extended
ap-
a motion
application
proceed with
ter- Groseth filed
to dismiss
Written
peal, claiming
mination of Groseth’s truck franchise was
circuit court lacked
by IH to
Depart-
jurisdiction
made
the South Dakota
in the matter. Groseth con-
regulat-
Legislature
statutory provisions
1. We note that the South Dakota
ch.
§ 63.
shortly
repealed
ing
ch. 32-6A
after
dealers are
vehicle
now contained
Department,
plied
to the
termination of
ch. 32-6B.
truck
franchise. See 1986 S.D.Laws
acquired
Although
certified mail.
tended that the circuit court never
istered or
received within
jurisdiction
actually
statutorily pre-
to hear IH’s
because
period
appeal upon
appeal,
of the notice of
scribed time
IH’s notice of
it
*3
argues
The circuit court de-
nonetheless
seth was defective.
that notice was served
improperly
motion to
It also
because
ordinary,
nied Groseth’s
dismiss.
it arrived via
decision,
hold-
first
mail.2
reversed the
class
Groseth,
ing
by refusing
a
that
to become
upon
princi-
The statute
which Groseth
substantially
failed
to
relies,
1-26-31,
pally
SDCL
reads as fol-
comply
requirements imposed by
lows:
court
agreement.
The circuit
appeal
by serving
An
shall be taken
a
requirements
further held that
appeal
of
upon
party
notice
adverse
the
It
were
con-
both essential
reasonable.
upon
agency
the
which rendered the
cluded that
failure
to
decision,
same,
by filing
the
or a
requirements
with
an in-
these
constituted
copy,
proof
certified
of such service
dependent
upon
good
basis
which
cause
in
office of the
the
clerk of courts of the
termination had been shown.
in
county which the
of
appeal
venue
the
appeals
Groseth now
the circuit court’s
set,
thirty
within
days
agency
is
after
decision to
It
this court.
contends that
or,
notice of
served
the final decision
if a
refusing
circuit court erred in
dismiss
to
rehearing
is authorized
law and is
appeal
jurisdiction.
lack of
requested,
thirty days
within
after notice
seth also claims that the circuit court erred
served
has been
of the decision thereon.
in holding
that IH had shown
required by
may
Service
this section
be
IH,
terminate Groseth’s truck franchise.
performed by registered or certified mail
having complied with the notice
review
of
complete
and is
when the material to be
requirements contained in
15-26A-
SDCL
deposited
is
served
United
of
portion
asks this court
review that
postal
States
service.
the circuit court’s decision
that
which held
only
that
We note
the last sentence of this
anticipatory
waived the issue of
breach
pertains
serving
statute
a
notice of
agreement.
of the franchise
peal.
operative
in said
verb
sentence
disagree
“may
performed.” Ordinarily,
We
with Groseth’s conten
is
refusing
“may”
tion that
court
in
given
permis-
erred in
word
a
statute is
discretionary meaning.
to dismiss IH’s
asserts
sive or
It is not
appeal
that notice
in
obligatory
mandatory
of
this matter was
or
is the
as
word
improperly
Peterson,
It
served.
claims that
the re
“shall.”3
See Person v.
296
quirements
regard
Linn,
of
1-26-31
N.W.2d 537
Tubbs v.
75
serving
appeal
(1955);
of a notice of
are
70 N.W.2d
2A
satisfied
S.D.
Suther-
personal
by reg-
(4th
service or
Const.
643-44
service
land Stat.
57.03 at
ed.
§
by legal
represented
statutory
meaning
language,
2. Because Groseth was not
of
we look to the
hearing,
context,
words,
matter,
counsel at the
appeal
IH sent
subject
the notice
effects and con
appearing
person
to the
on Groseth’s
sequences
spirit
purpose
as well as the
behalf, namely, Clifford Groseth.
Tubbs,
See
at
the statute.
75 S.D.
70 N.W.
legislative
2d
We believe
at 375.
that the
instances,
3. We note
certain
word
that in
nearly
present
in
case is
as clear as
"may” has the
of "must.”
ex rel.
effect
See State
1-26-31,
language
legisla
of SDCL
itself.
O’Neill,
South Dakota Game & Fish Comm’n v.
of the word “shall” in the statute’s first
ture’s use
(1934). Although
62 S.D.
manually process orders conduct busi- addition,
ness dealers. who
was dealer refused to
participate in the DCN. Unrefuted testi-
mony hearing indicated that its re-
fusing presented hardship to do so to IH. light foregoing, we hold that IH
established cause for truck franchise and affirm the
decision of the circuit court. We deem the which IH
issue raises notice of review to
be moot need not address it.
MORGAN, HENDERSON, and,
MILLER, JJ., concur.
SABERS, J., concurs in specially part.
concurs
SABERS, (concurring Justice in part and
concurring specially part). concur specially
I on the notice issue timely
because Groseth received notice of prejudiced was not harmed or
any manner the fact that it arrived
“ordinary, first class mail.” Matter of
A.L.,
of B.J.E.,
(S.D.1988).
tion construction of intent in See writing 1-26-31. in Jensen my
Ranch, Marsden, Inc. v. 440 N.W.2d (S.D.1989). However, dicta
majority opinion implies that a sum complaint properly
mons is served
“ordinary, first class mail” under SDCL
15-6-5(b) Jensen clearly incorrect.
Ranch, supra.