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Davis v. Chrysler Group, LLC

United States District Court, E.D. Michigan, Southern Division

July 24, 2015

FRED DAVIS, Plaintiff,




This is a breach of contract and race discrimination case. Plaintiff Fred Davis (“Davis”) is suing Chrysler Group, LLC (“Chrysler”) claiming breach of contract and promissory estoppel. Davis claims that Chrysler breached its promise to provide him the opportunity to become the owner of a Chrysler dealership as part of Chrysler’s Market Investment (“M.I.”) Program. Davis also claims that Chrysler is estopped to deny that it had an enforceable contract with him. Finally, Davis claims that Chrysler subjected him to racial discrimination in the formation and enforcement of a contract, in violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq., the Michigan Elliott Larsen Civil Rights Act (ELCRA), M.C.L. 37.2012, et seq., and 42 U.S.C. §1981, et seq.

Now before the Court is Chrysler’s Motion for Summary Judgment (Doc. 31). For the reasons that follow, Chrysler’s Motion is GRANTED IN PART AND DEFERRED IN PART.



Chrysler’s M.I. Program is “designed to provide assistance to individual operators who otherwise qualify but lack sufficient capital to operate a dealership.” (Joint Statement of Facts, Doc. 49 at 3) The objective of the program includes an assessment of the operator’s ability to successfully manage a Chrysler dealership. Through the program, Chrysler and the operator jointly contribute capital to the dealership and over time the operator purchases Chrysler’s stock interest in the dealership, thereby becoming sole owner of the dealership. The M.I. operator is designated general manager of the dealership, and as such is responsible for day-to-day management and operations.

Chrysler employs a rigorous process to approve individuals for participation in the M.I. Program. A proposed M.I. dealership agreement must be approved through the Dealer Agreement Portfolio (“DAP”) process, and any prospective M.I. operator must complete an application and undergo a background investigation and credit check. In addition, the DAP process requires the candidate to identify his personal assets and liabilities, as well as the source of unencumbered funds for investment in the dealership. An application for a new operator for an existing M.I. dealership also requires the completion of several documents relating to operational forecasts, working capital and operating investment agreements, balance sheets, a letter of intent, and other approvals. A comprehensive business plan, including a 12-month forecast and buy-out projection, is also required. Finally, the application form states that “no representation, commitment, promise or statement is binding upon or enforceable against [Chrysler] or [its] affiliates unless made in writing and signed by the President, a Vice President, or the national Dealer Placement Manager. No one other than the President, a Vice President, or the national Dealer Placement Manager has the authority to approve a letter of intent or Dealer Agreement.” (Doc. 49 at 4-5) Once approved, the M.I. operator employment agreement provides that the operator’s employment as general manager of the M.I. dealership is terminable at will. Until Chrysler’s interest in the dealership has been bought out by the operator, Chrysler may terminate the operator’s participation in the M.I. Program at any time.



Davis is an African American male residing in Auburn Hills, Michigan, and a current employee of Chrysler. In 2011, Davis held the position of Market Investment (“M.I.”) Manager. As M.I. Manager, Davis was responsible for reviewing the operations of the M.I. Dealerships and working with the general managers to improve operations at those dealerships. From time to time, Davis would travel to unprofitable M.I. dealerships to manage a dealership on behalf of Chrysler, remove the general manager, and/or shut a dealership down.


In January 2011, Davis was assigned as part of his job responsibilities to act as Interim General Manager of the Stone Mountain Chrysler Jeep Dodge Dealership (“Stone Mountain dealership”) in Georgia. The Stone Mountain dealership was then being operated under the M.I. Program. Under its existing general manager, the Stone Mountain dealership struggled financially and failed for an extended period of time to meet its Minimum Sales Responsibility (“MSR”). Chrysler removed the existing general manager and assigned Davis to oversee operations at the Stone Mountain dealership.. Davis moved to Georgia to undertake these responsibilities. During his time in Georgia, Davis continued as a Chrysler employee.


In March 2011, Davis began discussions with his supervisors regarding his becoming the M.I. operator of the Stone Mountain dealership. Davis expressed an interest in the opportunity to invest in the dealership through the M.I. Program, conditioned on the facility being renovated or possibly relocated. Davis was aware, however, that before becoming an M.I. operator, several specific agreements would have to be executed, and that he would have to resign from his employment with Chrysler and invest substantial funds in the dealership.

On April 22, 2011, Davis sent his supervisor, Gerard Quinn, Senior Manager of Financial Services, an e-mail asking him to confirm that the Stone Mountain dealership would remain a M.I. dealership and that Davis would be the M.I. operator. Davis wrote:

My wife is a college professor and she needs to notify her employer that she will not be returning in the fall. In addition, she wants to start applying for employment in the Atlanta area ASAP. Before my wife proceeds with these actions, I want to confirm that Stone Mountain [dealership] will remain an M.I. Store and I will be the invested operator. Please advise.

(Doc. 44 at 30) On April 25, 2011, Quinn responded, “Yes, that is correct Fred, it’s yours if that is still your plan. . . . [T]his week we will discuss your timing and ...

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