The Minnesota Court of Appeals holds that Deere's termination of a farm equipment dealership violated the Agricultural Equipment Dealership Act because market share requirements were communicated too late, imposed inconsistently, and paired with an impossible cure notice.
Outcome: Affirmed for respondents.
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(as of 9/30/2026)
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What happened
The facts of the case, in plain language.
Wadena Implement had been a Deere farm equipment dealership since 1959, operating under a written dealer agreement, with respondent Steven Nelson as majority shareholder and vice president.
In July 1990, market share data showed Wadena Implement had improved its standing by 75 percent to 14.3 percent, still well below territory and division averages, and Deere decided in early August 1990 to terminate the dealership effective March 1, 1991.
Deere's standardized Dealer Agreement contained no reference to market share obligations until an October 26, 1989 amendment effective May 1, 1990, and its first specific written references to a market share "requirement" appeared in January and March 1989 letters, making 1989 the first year Wadena Implement had notice that specific market share averages were being used as a performance requirement.
Because Deere compiles market share data annually, proving "consistent failure" under Minn.Stat. § 325E.062, subd. 1(8) requires at least two years of substantial noncompliance, and because 1989 was the first year a specific requirement could be inferred, Deere could not meet its burden of proof.
Deere's August 10, 1990 termination letter technically complied with the notice requirements of both the MAEDA and the Dealer Agreement but violated the MAEDA through its ambiguity and the practical impossibility of compliance.
What the court decided
Deere & Company terminated Wadena Implement's farm equipment dealership after the dealer's market share fell far below the averages of other Deere dealers in its territory and division. Deere first identified specific market share targets in letters sent in January and March 1989, then decided in August 1990 to end the relationship effective March 1, 1991. Wadena Implement sued under the Minnesota Agricultural Equipment Dealership Act (MAEDA), which permits termination only for "good cause." The trial court granted Wadena Implement summary judgment—a decision without a trial—permanently enjoined Deere from using the dealer's 1989 market penetration failure as a termination basis, and awarded attorney fees. The court of appeals affirmed, reasoning that the requirement was not communicated before the year began, one year of shortfall cannot establish "consistent" failure, and the cure notice was impossible to satisfy in practice.
- A farm equipment manufacturer violates the Minnesota Agricultural Equipment Dealership Act when it terminates a dealership for failing to meet a market share requirement that was not communicated to the dealer unambiguously and before the year for which it applied began, because a requirement imposed that late cannot be a reasonable term of the dealership agreement. (*387)
- Because a manufacturer compiles market share data annually, it must show at least two consecutive years of substantial noncompliance to establish that a dealer 'consistently fails' to meet its market penetration requirements under Minn.Stat. § 325E.062, subd. 1(8). (*388)
- A termination notice that technically complies with statutory and contractual notice periods still violates the MAEDA where the cure provisions are ambiguous and practically impossible to satisfy, such as where the dealer cannot retroactively improve completed sales years and lacks a full compliance year and current market share data within the cure period. (*388)
- Where injunctive relief is explicitly authorized by statute, a trial court properly exercises its discretion by granting the injunction when the statutory prerequisites are demonstrated and the relief fulfills the legislature's purposes, and combining the injunction hearing with summary judgment provides an adequate opportunity to consider the relevant equitable factors. (*389)
- A dealer who prevails on a claim that a manufacturer violated the Minnesota Agricultural Equipment Dealership Act may recover the actual costs of the action, including reasonable attorney fees, with success in the action being the only prerequisite. (*389)
How the court reached its decision
The court's reasoning, step by step.
Whether Deere's market share requirement was communicated in a way and at a time that made it a reasonable, enforceable term supporting good-cause termination under the MAEDA. Deere's standardized Dealer Agreement contained no market share obligation until an October 1989 amendment effective May 1990, and the first specific written references appeared in January and March 1989 letters, making 1989 the first year Wadena Implement had notice; the demand that a 30-year-old dealership raise its market share roughly 500 percent in one year was unreasonable on its face. As a matter of law the requirement was not communicated so as to be an essential and reasonable term of the dealership agreement, and reliance on it violated the MAEDA.
Whether a single year of below-target market share established that Wadena Implement 'consistently failed' to meet Deere's market penetration requirements. Because Deere compiles market share data annually, proving consistent failure requires at minimum two consecutive years of substantial noncompliance, yet 1989 was the first year for which any specific market share requirement could be inferred. On the facts presented Deere could not meet its burden of proving consistent failure, so that ground could not support termination.
Whether Deere's August 1990 termination letter provided notice and an opportunity to cure that complied with the MAEDA. The letter, sent in August 1990, demanded a cure of 1989 sales figures that could not be improved retroactively and identified no corrective steps; termination was set for March 1, 1991, before Deere's own reliable 1990 data would become available in July 1991. Although the letter met the technical notice periods of both the MAEDA and the Dealer Agreement, its ambiguity and the practical impossibility of compliance violated the MAEDA as a matter of law.
Whether the trial court erred in granting a permanent injunction without a separate evidentiary hearing and in awarding attorney fees to the dealer. The trial court combined the injunction and summary judgment hearings, providing an opportunity to consider the relevant factors, and Wadena Implement succeeded in proving a MAEDA violation; Wisconsin courts construing the analogous Fair Dealership Law treat success in the action as the sole prerequisite to a fee award. The injunction was appropriate and the attorney fee award was not an abuse of discretion, so both were affirmed.
Key quotes from the opinion
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Cases the court relied on
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Minnesota statutes cited
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Cases that cite this one
12 later published cases cite this decision.
- State Ex Rel. Hatch v. Cross Country Bank, Inc. (Minn. Ct. App. 2005)
- State ex rel. Ulland v. International Ass'n of Entrepreneurs of America (Minn. Ct. App. 1995)
- State of Minnesota by Smart Growth Minneapolis, a Minnesota nonprofit corporation v. City of ... (Minn. Ct. App. 2024)
- Buetow v. A.L.S. Enterprises, Inc. (8th Cir. 2011)
- Frank Martin Sons, Inc. v. John Deere Construction & Forestry Co. (District Court, D. Maine 2008)
- Heck Implement, Inc. v. Deere & Co. (District Court, W.D. Missouri 1996)
- Pacific Equipment & Irrigation, Inc. v. Toro Co. (Minn. Ct. App. 1994)
- Iowa Supreme Court Attorney Disciplinary Board v. Richard Clay Mendez (Iowa 2014)
- Ken B. Peterson, Commissioner of the Minnesota Department of Labor and Industry v. United Parcel Service, Inc. (Minn. Ct. App. 2014)
- Dunn v. National Beverage Corp. (Minn. Ct. App. 2007)
- Kids'klub, Inc. v. State Dept. of Human Res. (Ala. Civ. App. 2003)
- Breezy Point Holiday Harbor Lodge—Beachside Apartment Owners' Ass'n v. B.P. Partnership (Minn. Ct. App. 1995)
This list shows which later cases cite this one. It does not say how they treated it, and no review of that has been done. Not a substitute for Shepard’s or KeyCite — verify before relying.
Full opinion
The complete text of the court's opinion as published.
Opinion
OPINION
Appellant Deere & Co. challenges (1) the trial court’s finding that appellant violated the Minnesota Agricultural Equipment Dealership Act through improper termination of respondents’ dealership; (2) the court’s grant of a permanent injunction; and (3) the court’s award of attorney fees. We affirm.
FACTS
Respondent Wadena Implement Company (Wadena Implement) has been a farm equipment dealership for appellant Deere & Company (Deere) since 1959. Respondent Steven Nelson is the majority shareholder and vice president of Wadena Implement. Wadena Implement’s business relationship with Deere is governed by a written dealer agreement.
Deere provides each of its dealers with a trade area, commonly referred to as the dealer’s Area of Responsibility (AOR), which represents the area from which the dealer should draw customers. Wadena Implement’s AOR includes parts of Cass, Ottertail, Todd, and Wadena Counties. Deere continuously evaluates and reviews its dealers based upon their sales performance within their AOR. As part of the evaluation process, Deere annually reviews its dealers and prepares for each a written Dealer Business Review, Dealer Marketing Objective, and Individual Action Plan.
In 1987, Deere began using weighted market share data developed to evaluate more accurately its dealers’ performance. Wadena Implement’s market share for 1987 was 8.6 percent, while other Deere dealers in Territory 24 averaged 31.9 percent and in Division II averaged 34.9 percent. In 1988, Wadena Implement’s market share dropped to 8.1 percent, while the corresponding territory and division averages increased to 44.5 percent and 47.9 percent, respectively. During Wadena Implement’s annual review in December 1988, Deere informed Nelson that he needed to increase his market share to between 16 and 20 percent of the market.
Deere sent Nelson a letter dated January 27, 1989, stating:
Your 8.6% agricultural market share * * * for the 1987 year, is totally unacceptable to us * * *. [I]f you do not achieve significant progress towards achieving market share levels at your Wadena dealership comparable to average market share levels [in Territory 24 and Division II] during 1989, we will reassess our position regarding a continuing business relationship with you.
On March 8, 1989, Nelson met with five Deere managers, at their request, to discuss his sales performance. The managers said they intended to review the 1989 sales figures and, unless Wadena Implement’s *386 share improved to the territory average, “different action” would be taken. Deere confirmed the substance of this meeting in a letter to Nelson dated March 9, 1989. The letter did not mention specific consequences to Wadena Implement if the territory average market share goal was not met.
During Wadena Implement’s annual business review on January 9, 1990, Deere told Nelson that he needed to increase Wadena Implement’s market share to between 20 and 30 percent. The annual business review form, dated January 9, 1990, states:
If Steve is to remain a JD dealer his market share has to increase sizeably above 8.1%. He is aware of this increase through a meeting [the managers] had with Steve last March 89.
The review form also indicates that ownership of the dealership would not continue for five years unless the market shares moved up from 8.1 percent to close to the territory average. A copy of the Business Review and Action Plan was provided to Wadena Implement. At the time of the review, 1989 market share information was not yet available.
In July 1990, Deere’s 1989 market share data became available and revealed that Wadena Implement had improved its standing by 75 percent, to 14.3 percent of the market. This was still well below the territory and division averages, however, and in early August 1990, Deere made the final decision to terminate Wadena Implement, effective March 1, 1991.
This decision was communicated in an August 10, 1990, letter to Nelson. The letter provided Wadena Implement with the 180 days’ notice required under the Dealer Agreement and also allowed Wadena Implement 60 days to cure the deficiencies for which it was being terminated, as required by the Minnesota Agricultural Equipment Dealership Act.
Wadena Implement filed this action on February 5, 1991, seeking injunctive relief damages based on Deere’s alleged breach of contractual and common law obligations, as well as Deere’s alleged violation of the Minnesota Agricultural Equipment Dealership Act. The trial court granted Wadena Implement’s motion for summary judgment and ordered that Deere be permanently enjoined from using Wadena Implement’s failure to achieve adequate market penetration in 1989 as a basis upon which to terminate the Dealership Agreement.
ISSUES
1. Did the trial court err in finding that appellant violated the Minnesota Agricultural Equipment Dealership Act through improper termination of respondents’ dealership?
2. Did the trial court err in granting to respondents a permanent injunction?
3. Did the trial court err in awarding attorney fees to respondents?
ANALYSIS
On review of a summary judgment, this court must determine whether any genuine issues of material fact are disputed and whether the trial court erred in its application of the law. Betlach v. Wayzata Condominium, 281 N.W.2d 328, 330 (Minn. 1979). An appellate court is not bound by the trial court’s application of the law to any undisputed facts. A.J. Chromy Constr. Co. v. Commercial Mechanical Serv., Inc., 260 N.W.2d 579, 582 (Minn. 1977).
I.
The Minnesota Agricultural Equipment Dealership Act (MAEDA) provides that a farm equipment manufacturer may terminate a dealership agreement if it has “good cause.” Minn.Stat. § 325E.062, subd. 1 (1990). The MAEDA defines “good cause” as:
[Fjailure by a farm equipment dealer to substantially comply with essential and reasonable requirements imposed upon the dealer by the dealership agreement, if the requirements are not different from those requirements imposed on other similarly-situated dealers by their terms.
*387 Id. In addition to this general definition, the MAEDA enumerates eight other situations in which a manufacturer would have the requisite “good cause,” including where:
[T]he farm equipment dealer, after receiving notice from the manufacturer of its requirements for reasonable market penetration based on the manufacturer’s experience in other comparable marketing areas, consistently fails to meet the manufacturer’s market penetration requirements.
Id. at subd. 1(8).
The trial court, in granting summary judgment, concluded that Deere had violated the MAEDA in five ways. 1 This court agrees with the trial court’s grant of summary judgment based on three of its conclusions: (a) as a matter of law the market share requirement was not communicated by Deere to respondents in a way or at a time so as to make the requirement a reasonable term of the dealership agreement; (b) as a matter of law Deere cannot establish consistent failure by respondents to meet any market share requirements imposed by Deere; and (c) Deere’s notice was defective in a practical way because the steps the dealer was required to take to rectify the deficiency were impossible to meet and thus were unreasonable as a matter of law. These three shortcomings in Deere’s process of terminating Wadena Implement violate the MAEDA. We need not address the other two grounds for summary judgment.
A. Failure to Communicate
The MAEDA allows a manufacturer to use market share data as criteria for measuring a dealer’s performance, 2 see Minn.Stat. § 325E.062, subd. 1. But Deere’s standardized Dealer Agreement did not include reference to any market share obligations until the October 26, 1989, amendment, which did not take effect until May 1, 1990. Also, it was not until the letters sent to Wadena Implement in January and March of 1989 that Deere included specific, references to a “requirement” that the dealership achieve a market share level “comparable” to the division and territory averages. Thus, 1989 is the first year in which Wadena Implement could be found to have had notice that specific market share averages were being used by Deere as a performance requirement.
We agree with the trial court’s conclusion that:
If a specific market share is to be required for a particular year, elementary notions of fairness would dictate that the dealer unambiguously be informed of the requirement before the year begins. * * * [T]he communication came .too late to be reasonable.
*388 Further, for a newly imposed market share requirement to be reasonable, the dealer must have at least some realistic prospect of achieving the level required within the time permitted. If the termination letter is taken at face value, Wadena Implement was terminated for failing to increase its market share by 500 percent in one year (1989). For a 30-year-old dealership such a requirement is unreasonable on its face.
B. The “Consistently Fails" Standard
The MAEDA specifically states that “good cause” termination for failure to achieve a stated market share goal is permissible only if the dealer “consistently fails to meet the manufacturer’s market penetration requirements.” Minn.Stat. § 325E.062, subd. 1(8) (emphasis added). We agree with the trial court that market share requirements must be set at periodic intervals, and the dealer’s failure to reach those required market share levels must occur over a number of intervals before the “consistently fails” standard for termination can be met.
Because Deere compiles its market share data on an annual basis, Deere would have to show at a minimum that Wadena Implement substantially failed to comply with its market share requirements two years in a row. Because 1989 was the first year for which a specific market share requirement could be inferred, and because at least two years of non-compliance must be present for consistent failure to be found, Deere, on the facts presented, could not meet its burden of proof that Wadena Implement consistently failed to meet its reasonable market share requirements.
C. Defective Notice for Cure
Deere sent its notice of termination because of Wadena Implement’s alleged failure to reach 1989 market share requirements. The first problem with the termination notice is that it was not sent until August 1990. Obviously Wadena Implement could not go back and improve its sales records for 1989 after-the-fact. Deere provided no information as to what actions Wadena Implement needed to take to “cure” problems with 1989 sales.
Second, if Deere intended to use 1990 market share performance to measure Wadena Implement’s efforts to cure, Deere would need to wait until July of 1991 to make its final termination decision; Deere does not possess reliable market share performance data for a year until July of the following year. Yet the termination was to take effect March 1, 1991, which did not allow either party the opportunity to review the 1990 data.
Finally, since market share performance is measured annually, a dealer logically should be entitled to a full year’s time in which to comply with reasonable market share requirements. 3
Thus, although Deere’s August 10, 1990, termination letter technically complies with the notice requirements in both the MAE-DA and the Dealer Agreement, it violates the MAEDA by virtue of its ambiguity and the practical impossibility of compliance.
We find that Deere violated the MAE: DA’s termination provision, as a matter of law, through the unreasonableness of the time allowed and the manner in which Deere imposed its market penetration requirement upon Wadena Implement, and the manner in which it terminated the dealership.
II.
Deere also appeals the grant of injunc-tive relief to Wadena Implement, arguing that the trial court erred in failing to hold an evidentiary hearing to analyze the legal requirements for such relief.
The decision whether to grant in-junctive relief rests within the trial court’s discretion. Cherne Indus., Inc. v. Grounds & Assoc., Inc., 278 N.W.2d 81, 91 (Minn. 1979). It is error, however, for the trial court to grant injunctive relief without *389 evaluating specific factors. 4 M.G.M. Liquor Warehouse Int’l, Inc. v. Forsland, 371 N.W.2d 75, 77 (Minn.App. 1985).
On the other hand, where injunc-tive relief is explicitly authorized by statute, as it is here under Minn.§tat. § 325E.065 (1990), proper exercise of discretion requires the issuance of an injunction if the prerequisites for the remedy have been demonstrated and the injunction would fulfill the legislative purposes behind the statute’s enactment. United States v. White, 769 F.2d 511, 515 (8th Cir. 1985).
In a manner similar to White, where the court combined the injunction hearing with the trial, the trial court here combined the injunction and summary judgment hearings, providing the opportunity for consideration of relevant factors. Further, because the MAEDA explicitly provides for injunctive relief where a violation has occurred, the trial court’s injunctive relief is appropriate.
III.
The remaining issue is whether the trial court erred in awarding respondents their attorney fees and costs as part of this litigation. The MAEDA includes the following clause:
If a farm equipment manufacturer violates sections 325E.061 to 325E.065, a farm equipment dealer may bring an action against the manufacturer * * * for damages sustained by the dealer as a consequence of the manufacturer’s violation, together with the actual costs of the action, including reasonable attorney’s fees.
The statutory language clearly gives respondents a right to seek fees as part of their remedy for Deere’s violation of the MAEDA. In interpreting the similar Wisconsin Fair Dealership Law (WFDL), the Wisconsin Court of Appeals held that the only prerequisite to recovery of reasonable attorney fees is success in the action. Lindevig v. Dairy Equipment Co., 150 Wis.2d 731, 742, 442 N.W.2d 504, 508 (Wis.App. 1989). In another recent case, the Wisconsin court held that the manufacturer’s decision to abandon termination proceedings did not prevent the award of attorney fees because the dealer has an express statutory right to such fees under the WFDL. Siegel v. Leer, Inc., 156 Wis.2d 621, 629-32, 457 N.W.2d 533, 536-38 (Wis.App. 1990).
Liability under the MAEDA is established when a manufacturer terminates a dealer without the required “good cause” or sufficient notice and opportunity to cure. Wadena Implement was successful in its action against Deere, which was found to have violated the statute. Therefore, it was not an abuse of discretion for the court to have awarded attorney fees to respondents.
DECISION
A manufacturer’s termination of a dealership agreement violates the Minnesota Agricultural Equipment Dealership Act when the manufacturer fails to communicate clearly the specific market share requirements being imposed on the dealer, where the manufacturer fails to show that the dealer consistently failed to meet those requirements, and where the termination notice and cure provisions are ambiguous and impossible to achieve. Injunctive relief is proper where it is explicitly authorized by statute and where the trial court has had an opportunity to consider all relevant factors. A dealership may be awarded attorney fees under the Minnesota Agricultural Equipment Dealership Act where it has proven a violation of the Act by the manufacturer.
Affirmed.
. The court concluded:
First, that John Deere did not establish a requirement that Wadena Implement achieve Territory or Division II averages for * * * market share in 1989; second, that if an essential market share requirement was imposed by Deere for 1989, it did not exceed 16-20%; third, if Deere intended to impose a requirement that Wadena Implement achieve Territory or Division II averages for market share in 1989, that requirement was not communicated by Deere in a way or at a time so as to make imposition of the requirement both an essential and reasonable term of the dealership agreement; fourth, that Deere cannot establish that Wadena Implement “consistently failed” to meet any market share requirements imposed by Deere. * * * The fifth critical finding is drawn from the first four * * *. [T]he notice that Deere sent out was defective because the “notice was wholly inadequate in a practical sense," and because “the steps that [the dealer] was required to take to rectify the deficiency were impossible for [the dealer] to meet and thus were unreasonable.”
(Emphasis in original; citation omitted.)
. Case law interpreting a nearly identical Wisconsin statute has found that market share goals, in general, are a permissible dealership requirement. See At Bishop Agency, Inc. v. Lithonia-Division of Natl Serv. Indus., Inc., 474 F.Supp. 828, 834 (E.D.Wis. 1979) (manufacturer’s requirement that dealer meet market penetration goals is reasonable and nondiscriminatory in general); L-O Distributors, Inc. v. Speed Queen Co., 611 F.Supp. 1569, 1580 (D.Minn. 1985) (”[T]he WFDL is intended to prevent the arbitrary and capricious termination of dealerships, and not to afford tenure to nonproductive dealers. * * * [G]rantors may terminate dealerships that fail to achieve reasonable sales goals.”).
. See Al Bishop Agency, 474 F.Supp. at 834 (termination notice was inadequate in practical sense, and it was impossible ever to have complied with the cure requirements), interpreting similar notice requirements in the Wisconsin Fair Dealership Law.
. These factors traditionally include the relationship between the parties, the harm to plaintiff if injunctive relief is denied as compared to the harm to defendant if it is granted, plaintiff’s likelihood of success on the merits, and, any public interest or public policy that may be involved. See Dahlberg Bros., Inc. v. Ford Motor Co., 272 Minn. 264, 274-75, 137 N.W.2d 314, 321-22 (Minn. 1965).
Continue your research
- Minnesota appellate decisions applying the MAEDA's good-cause, consistent-failure, and cure-notice standards to dealership terminations
- Wisconsin Fair Dealership Law cases on market share goals and inadequate cure notices, following the Lindevig and Siegel line
- Secondary commentary on statutory dealer-protection acts and the reasonableness of manufacturer-imposed performance requirements
Case-law data current through September 30, 2026. Source: CourtListener bulk data.