## Facts

- Frank Coulson, Inc.-Buick operated a Buick dealership in Florida under a General Motors (GM) franchise requiring GM approval for any transfer involving the franchise.
- GM executives pressured Coulson to sell the dealership; Coulson authorized GM to help locate acceptable buyers.
- Coulson negotiated with another Buick dealer, Glenn Ralph, and they agreed on a $100,000 purchase price for Coulson’s dealership assets.
- GM’s zone/regional manager refused to approve any sale price above $50,000 and set that cap without investigating Ralph’s ability to pay more.
- Coulson asserted the $50,000 figure covered only tangible assets and excluded any value for goodwill.
- Facing GM’s refusal to approve a higher price, Coulson and Ralph completed the sale at a stated price of $50,000.
- Coulson sued GM for tortious interference with its contractual/business negotiations; a jury awarded Coulson $25,000.
- The district court entered judgment notwithstanding the verdict (JNOV) for GM based on GM’s privilege/justification to intervene as manufacturer-franchisor; Coulson appealed.

## Issues

1. Whether GM’s conduct in capping the approved sale price constituted tortious interference with Coulson’s negotiations or was justified by a privilege grounded in GM’s legitimate business interest in its dealership system.
2. Whether a manufacturer-franchisor’s contractual approval rights and economic stake in dealership transfers permit it to participate in, and impose conditions on, a franchise sale without incurring tort liability.

## Decision

- The Fifth Circuit affirmed the JNOV for GM.
- GM had a legitimate economic and contractual interest in the dealership’s transfer and continued operation and was therefore privileged to participate in the negotiations and condition its approval.
- Viewing the evidence most favorably to Coulson, the proof was insufficient as a matter of law to show GM acted without justification (i.e., with legally improper “malice”).
- The jury’s liability finding and $25,000 damages award could not stand.

## Legal Principles

- A party with a legitimate economic or contractual interest in a business relationship may be privileged to interfere with another’s negotiations when acting to protect that interest.
- A manufacturer-franchisor’s approval rights over dealership transfers can justify its participation in franchise sale negotiations and the imposition of approval conditions.
- “Malicious” or improper interference requires more than intentional conduct that harms a party’s bargaining position; liability requires interference outside the scope of recognized justification/privilege.
- On JNOV review, if the evidence cannot support a finding that the defendant’s conduct was unjustified, judgment for the defendant is required despite a jury verdict.

## Conclusion

The Fifth Circuit held that GM’s insistence on a maximum approved sale price, as part of its contractual approval role and economic interest in dealership stability, was privileged as a matter of law and defeated Coulson’s tortious interference claim.


Frank Coulson, Inc.-Buick v. Gen. Motors Corp., 488 F.2d 202 (5th Cir. 1974)