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Author Topic: Harley off the hook in dealer territory squabble  (Read 1541 times)

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Harley off the hook in dealer territory squabble
« on: December 23, 2004, 11:07:10 AM »

Harley off the hook in dealer territory squabble

Associated Press
Posted on Wed, Dec. 22, 2004

MADISON, Wis. - Motorcycle giant Harley-Davidson did nothing wrong when it moved a zip code out of one southeastern Wisconsin dealer's territory to another, a state appeals court ruled Wednesday.

Dealer Racine Harley-Davidson, Inc., (RHDI) had argued the agreement it reached with Harley didn't allow the motorcycle maker to transfer part of its territory to neighboring dealer Uke's Harley-Davidson in Kenosha.

But the 2nd District Court of Appeals ruled assigning territories wasn't part of the agreement, reversing Racine County Circuit Judge Charles Constantine's decision.

According to the appeals court opinion, the agreement RHDI reached with Harley in 1992 laid out RHDI's territory as all of Racine County.

But Uke's moved, putting it closer to the city of Burlington, and in 2001 Harley told RDHI that Burlington would be reassigned to Uke's. The Burlington area produced the second-highest sales in RHDI's territory in 2001, according to footnotes in the appeals court decision.

RHDI filed a complaint alleging the territory change was a modification to its deal and would decrease its market potential and rduce the amount of product RHDI would get. RHDI also wouldn't be in the running for a second outlet in the Burlington area.

The Division of Hearings and Appeals ruled in 2003 in favor of Harley, saying altering a territory didn't represent a change to the deal.

Judge Constantine reversed that ruling, saying territory definitions were part of the agreement.

The appeals court agreed with the Division of Hearings and Appeals. It ruled that state statutes don't require parties to designate the dealer's specific area of sales responsibility in the deal.

Harley routinely modifies dealers' territories for various reasons, including dealer relocation, the court said, adding it gave great weight to the decision of the Division of Hearings and Appeals

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