When Does The Statute of Limitations Begin to Run on WFDL Claims?

Published by Jim Egle on

Although the Wisconsin Fair Dealership Law (“WFDL”) provides significant protections for franchisees and dealers against termination and non-renewal, the statute of limitations for filing WFDL claims is one year. That short limitations period can be a minefield for parties seeking relief under the WFDL.

For 30 years, the Wisconsin Supreme Court’s ruling in Les Moise, Inc., v. Rossignol Ski Co. has provided the principal precedent in evaluating when WFDL claims accrue for purposes of the one-year statute of limitations.  In Les Moise, the court held that a Chapter 135 claim accrued on the date that the dealer receives notice of an allegedly improper termination, instead of the actual date of termination.

A recent unreported decision of the Wisconsin Court of Appeals, Chili Implement Company v. CNH America, LLC, illustrates unresolved issues that remain in applying the Les Moise holding.  The CNH court held that “we disagree with CNH that Les Moise establishes that all causes of action under the Wisconsin Fair Dealership Law accrue when a dealer receives a termination notice.”

The facts of CNH:

  • CNH sent a notice to Chili Implement on March 1, 2010, stating that Chili Implement is in default of the parties’ agreement because it has failed to achieve a satisfactory market share and to stock sufficient inventory.  The notice also stated that to avoid termination, Chili needed to accomplish two things within one year of the notice date:  “to meet or exceed 90% of the Wisconsin state market share” and to stock sufficient inventory to achieve that market share.
  • After a year passed, CNH determined that Chili Implement has failed to meet the stated requirements and terminated Chili effective May 31, 2011
  • Chili sued CNH on January 19, 2012, alleging violations of the WFDL, among other violations.

CNH alleged that under Les Moise, CNH’s claims under the WFDL were barred by the one-year statute of limitations.  The notice was sent March 1, 2010; the lawsuit was filed almost two years later, on January 19, 2012.  Chili Implement asserted that its WFDL claim accrued as of the date of actual termination, on May 31, 2011.  The trial court had granted summary judgment in favor of Chili Implement on the statute of limitations question, finding that a material factual dispute existed as to whether the 2010 notice was actually a notice of termination.

The CNH court did not answer how a lawsuit such as Chili Implement’s should be treated.  The CNH court cited limiting language from Les Moise that what matters is whether, upon receipt of a notice, the dealer was “immediately capable of determining” all of its claims.  The court noted that Chili Implement had two potential claims:  one based on inadequate notice (which was capable of immediate enforcement upon receipt of the 2010 notice) and termination without good cause (which depended on subsequent acts or omissions of CNH).  But because CNH had not briefed how such claims should be handled, the CNH court declined to do so, and found that CNH has failed to show that it had a winning statute of limitations argument based on Les Moise.

So the issue remains:  when does the WFDL statute of limitations begin to accrue?

[Chili Implement Company v. CNH New Holland, LLC, 2014AP1496]

Filed Under: statute of limitations, Wisconsin Fair Dealership Law, notice to cure, 135.04, dealer, grantor, Franchisor, Franchisee, Chapter 135

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