No Cure Opportunity Required Where Auto Dealer's Breach Is Incurable

Giuffre Hyundai, LTD v. Hyundai Motor America , No. 13-cv-0520, 2013 U.S. Dist. LEXIS 67795 (May 10, 2013) Many state motor vehicle dealer statutes require that franchisors provide dealers with an opportunity to cure contractual breaches prior to implementing terminations. The question of whether such a statutorily-mandated cure provision required a motor vehicle franchisor to provide a dealer with an opportunity to cure a breach that, absent the statute, would be incurable was recently decided by the United States District Court for the Eastern District of New York in Giuffre Hyundai, LTD v. Hyundai Motor America, No. 13-cv-0520, 2013 U.S. Dist. LEXIS 67795, at *4-5 (May 2, 2013). The New York Franchised Motor Vehicle Act (the "Dealer Act") requires that a franchisor provide a dealer with a "reasonable time" to cure a material breach of contract that forms the basis for a termination. N.Y. Veh. & Traf. Law § 463(2)(e)(2). The Dealer Act does not, however, expressly address the interplay of the statutory cure period with common law principles applicable to incurable breaches. In Giuffre, the court concluded that the Dealer Act does not require a motor vehicle franchisor to provide a dealer with an opportunity to cure breaches that were incurable under New York common law. Termination of the Franchise and the Prior Lawsuit Hyundai Motor America ("Hyundai") and Giuffre Hyundai, LTD (the "Dealer") had a longstanding franchise relationship. The parties' franchise agreement contained a termination provision that permitted Hyundai to terminate the Dealer upon a finding by any court or government agency that the Dealer engaged in, among other bad acts, any misrepresentations or unfair or deceptive trade practices. In a prior civil lawsuit brought by the Attorney General of the State of New York against the Dealer, a state trial court found that the Dealer had engaged in widespread deceptive business practices that violated several state and federal consumer protection laws. Relying on this finding, Hyundai terminated the Dealer's franchise for "material and incurable breach of its obligations" under the franchise agreement. Hyundai provided the Dealer with the statutorily-mandated ninety days written notice of termination, but did not provide the Dealer an opportunity to cure the breach. The Dealer filed an action against Hyundai seeking reinstatement of its dealership. On cross-motions for summary judgment, the Dealer challenged Hyundai's notice...