Constructive Termination Under the Wisconsin Fair Dealership Law. Cross & Janssen. Wis. Law. June 1997.
Notice of termination or change in dealership.
Except as provided in this section, a grantor shall provide a dealer at least 90 days' prior written notice of termination, cancellation, nonrenewal or substantial change in competitive circumstances. The notice shall state all the reasons for termination, cancellation, nonrenewal or substantial change in competitive circumstances and shall provide that the dealer has 60 days in which to rectify any claimed deficiency. If the deficiency is rectified within 60 days the notice shall be void. The notice provisions of this section shall not apply if the reason for termination, cancellation or nonrenewal is insolvency, the occurrence of an assignment for the benefit of creditors or bankruptcy. If the reason for termination, cancellation, nonrenewal or substantial change in competitive circumstances is nonpayment of sums due under the dealership, the dealer shall be entitled to written notice of such default, and shall have 10 days in which to remedy such default from the date of delivery or posting of such notice.
History: 1973 c. 179
A grantor must give a 90-day notice when termination is for nonpayment of sums due. White Hen Pantry v. Buttke, 100 Wis. 2d 169
, 301 N.W.2d 216
The notice requirement of this section applies to substantial changes of circumstances of a dealership, not a dealership agreement. Actions that substantially change competitive circumstances and that are controlled by the grantor or are allowed by the dealership agreement require the statutory notice. Jungbluth v. Hometown, Inc., 201 Wis. 2d 320
, 548 N.W.2d 519
Steps that the grantor requires the dealer to take in order to rectify a deficiency must be reasonable. Al Bishop Agency, Inc. v. Lithonia, 474 F. Supp. 828
The notice requirement does not impermissibly burden interstate commerce. Designs in Medicine, Inc. v. Xomed, Inc., 522 F. Supp. 1054
Remedies for termination should be available only for unequivocal terminations of the entire relationship. Meyer v. Kero-Sun, Inc., 570 F. Supp. 402
The insolvency exception to the notice requirement did not apply to insolvency that was not known to the grantor at the time of termination. Bruno Wine & Spirits v. Guimarra Vineyards, 573 F. Supp. 337
Assignment of a second distributor in Wisconsin did not breach the agreement or cause a substantial change in the competitive circumstances of the nonexclusive dealership agreement in violation of s. 135.03. However, the defendant's assignment of a second distributorship was a violation of this section because it caused a substantial change in the competitive circumstances of the plaintiff's truck blower distributorship and the defendant failed to provide the plaintiff with 90 days' written notice. Wisconsin Compressed Air Corp. v. Gardner Denver, Inc., 571 F. Supp. 2d 992
Repurchase of inventories.
If a dealership is terminated by the grantor, the grantor, at the option of the dealer, shall repurchase all inventories sold by the grantor to the dealer for resale under the dealership agreement at the fair wholesale market value. This section applies only to merchandise with a name, trademark, label or other mark on it which identifies the grantor.
History: 1977 c. 171
“Fair wholesale market value" means wholesale price. Roedel-Hanson and Associates, Inc. v. Environamics, Corp., 242 F. Supp. 2d 582
Application to arbitration agreements.
This chapter shall not apply to provisions for the binding arbitration of disputes contained in a dealership agreement concerning the items covered in s. 135.03
, if the criteria for determining whether good cause existed for a termination, cancellation, nonrenewal or substantial change of competitive circumstances, and the relief provided is no less than that provided for in this chapter.
History: 1973 c. 179
Federal law required enforcement of an arbitration clause even though that clause did not provide the relief guaranteed by this chapter, contrary to this section and s. 135.025. Madison Beauty Supply v. Helene Curtis, 167 Wis. 2d 237
, 481 N.W.2d 644
(Ct. App. 1992).
Action for damages and injunctive relief.
If any grantor violates this chapter, a dealer may bring an action against such grantor in any court of competent jurisdiction for damages sustained by the dealer as a consequence of the grantor's violation, together with the actual costs of the action, including reasonable actual attorney fees, and the dealer also may be granted injunctive relief against unlawful termination, cancellation, nonrenewal or substantial change of competitive circumstances.
History: 1973 c. 179
; 1993 a. 482
In an action for termination of a dealership upon written notice not complying with this chapter and without good cause, the statute of limitations started running upon receipt of the termination notice. Les Moise, Inc. v. Rossignol Ski Co., Inc., 122 Wis. 2d 51
, 361 N.W.2d 653
The term “actual costs of the action" includes appellate attorney fees. Siegel v. Leer, Inc., 156 Wis. 2d 621
, 457 N.W.2d 533
(Ct. App. 1990).
The measure of damages is discussed. C.A. May Marine Supply Co. v. Brunswick Corp., 649 F.2d 1049
A cause of action accrued when a defective notice under s. 135.04 was given, not when the dealership was actually terminated. Hammil v. Rickel Mfg. Corp., 719 F.2d 252
This section does not restrict recovery of damages with respect to inventory on hand at the time of termination to “fair wholesale market value." Kealey Pharmacy v. Walgreen Co., 761 F.2d 345
Accountant fees were properly included under this section. Bright v. Land O' Lakes, Inc., 844 F.2d 436
There is no presumption in favor of injunctive relief and against damages for lost future profits. Frieburg Farm Equip. v. Van Dale, Inc., 978 F.2d 395
An arbitration award that did not award attorney fees was enforceable. Parties may agree to bear their own legal expenses when resolving differences; what the parties may do, an arbitrator as their mutual agent may also do. George Watts & Son, Inc. v. Tiffany & Co., 248 F.3d 577
The determination of damages and attorney fees is discussed. Esch v. Yazoo Manufacturing Co., 510 F. Supp. 53
Punitive damages are not available in what is essentially an action for breach of contract. White Hen Pantry, Div. Jewel Companies v. Johnson, 599 F. Supp. 718
In any action brought by a dealer against a grantor under this chapter, any violation of this chapter by the grantor is deemed an irreparable injury to the dealer for determining if a temporary injunction should be issued.
History: 1977 c. 171
Four factors considered in granting preliminary injunction are discussed. The loss of good will constituted irreparable harm. Reinders Bros. v. Rain Bird Eastern Sales Corp., 627 F.2d 44
The court did not abuse its discretion in granting a preliminary injunction notwithstanding the arguable likelihood that the defendant would ultimately prevail at trial. Menominee Rubber Co. v. Gould, Inc., 657 F.2d 164
Although the plaintiff showed irreparable harm, the failure to show a reasonable likelihood of success on the merits precluded a preliminary injunction. Milwaukee Rentals, Inc. v. Budget Rent A Car Corp., 496 F. Supp. 253
A presumption of irreparable harm exists in favor of a dealer when a violation is shown. For the presumption to apply, a dealership relationship must be shown to exist. Price Engineering Co., Inc. v. Vickes, Inc., 774 F. Supp. 1160
If a plaintiff establishes the likelihood of a violation of this chapter, the statute creates a rebuttable of irreparable harm. The effect of the statute is to transfer from the plaintiff to the defendant the burden of going forward with evidence on the question of irreparable injury. If neither party presents evidence on the issue, the rebuttable presumption created by the statute requires a finding in favor of the dealer. If, however, the grantor presents evidence of the absence of irreparable injury, the presumption is no longer relevant, and the dealer must come forward with evidence negating the grantor's evidence. S&S Sales Corp. v. Marvin Lumber & Cedar Co., 435 F. Supp. 2d 879
Intoxicating liquor dealerships. 135.066(1)(1)
The legislature finds that a balanced and healthy 3-tier system for distributing intoxicating liquor is in the best interest of this state and its citizens; that the 3-tier system for distributing intoxicating liquor has existed since the 1930's; that a balanced and healthy 3-tier system ensures a level system between the manufacturer and wholesale tiers; that a wholesale tier consisting of numerous healthy competitors is necessary for a balanced and healthy 3-tier system; that the number of intoxicating liquor wholesalers in this state is in significant decline; that this decline threatens the health and stability of the wholesale tier; that the regulation of all intoxicating liquor dealerships, regardless of when they were entered into, is necessary to promote and maintain a wholesale tier consisting of numerous healthy competitors; and that the maintenance and promotion of the 3-tier system will promote the public health, safety and welfare. The legislature further finds that a stable and healthy wholesale tier provides an efficient and effective means for tax collection. The legislature further finds that dealerships between intoxicating liquor wholesalers and manufacturers have been subject to state regulation since the enactment of the 21st Amendment
to the U.S. Constitution and that the parties to those dealerships expect changes to state legislation regarding those dealerships.
This section does not apply to any of the following dealerships:
Dealerships in which a grantor, including any affiliate, division or subsidiary of the grantor, has never produced more than 200,000 gallons of intoxicating liquor in any year.
Dealerships in which the dealer's net revenues from the sale of all of the grantor's brands of intoxicating liquor constitute less than 5 percent of the dealer's total net revenues from the sale of intoxicating liquor during the dealer's most recent fiscal year preceding a grantor's cancellation or alteration of a dealership.
History: 1999 a. 9
; 2021 a. 238
A wine grantor-dealer relationship is not included within the definition of a dealership in s. 135.02 (3) (b). Sub. (2) provides the operative definition of intoxicating liquor for purposes of this chapter, and that definition explicitly excludes wine. Winebow, Inc. v. Capitol-Husting Co., Inc., 2018 WI 60
, 381 Wis. 2d 732
, 914 N.W.2d 631
This chapter does not apply:
To a dealership to which a motor vehicle dealer or motor vehicle distributor or wholesaler as defined in s. 218.0101
is a party in such capacity.
Where goods or services are marketed by a dealership on a door to door basis.
When a “dealer" under this chapter is also a “franchisee" under ch. 553, the commissioner of securities may deny, suspend, or revoke the franchisor's registration or revoke its exemption if the franchisor has contracted to violate or avoid the provisions of this chapter. This chapter expresses public policy and its provisions may not be waived. 66 Atty. Gen. 11.