558 F.2d 818 (6th Cir. 1977), 76-1386, Boatland, Inc. v. Brunswick Corp.

Docket Nº:76-1386.
Citation:558 F.2d 818
Party Name:BOATLAND, INC. and Robert L. Moore, Plaintiffs-Appellants, v. BRUNSWICK CORPORATION, Defendant-Appellee.
Case Date:July 25, 1977
Court:United States Courts of Appeals, Court of Appeals for the Sixth Circuit

Page 818

558 F.2d 818 (6th Cir. 1977)

BOATLAND, INC. and Robert L. Moore, Plaintiffs-Appellants,



No. 76-1386.

United States Court of Appeals, Sixth Circuit

July 25, 1977

Argued April 18, 1977.

Rehearing Denied Aug. 22, 1977.

Page 819

Gareth S. Aden, Nashville, Tenn., Charles J. Williams, Madison, Tenn., for plaintiffs-appellants.

Frank Gorrell, James W. Berry, Jr., and James O. Bass, Jr., Nashville, Tenn., for defendant-appellee.

Before WEICK, EDWARDS and CELEBREZZE, Circuit Judges.

WEICK, Circuit Judge.

Boatland and Moore have appealed from an interlocutory order of the District Court, certified pursuant to 28 U.S.C. § 1292(b), granting partial summary judgment in favor of Brunswick. The sole issue in the appeal is whether or not the Wisconsin Fair Dealership Law, Wis.Stat.Ann. §§ 135.01 et seq., applies to Boatland's outboard motor dealership contract with Brunswick. The District Court held that the statute was inapplicable. We disagree and reverse.

Moore is the President of Boatland, Inc., a Tennessee Corporation. The corporation has its place of business in Nashville, Tennessee, and sells both inboard and outboard boats, outboard motors, and other boating accessories. In 1965 Moore became a Mercury Marine Outboard motor dealer. In 1971 his corporation, Boatland, took over his dealership, and ever since has been a Mercury dealer. Mercury Marine is a division of the Brunswick Corporation, a Delaware Corporation. Mercury has its principal offices and a factory in Fond du Lac, Wisconsin.

Page 820

Brunswick and the plaintiffs have had an unbroken sequence of one-year marine engine dealership contracts since 1965. On September 1, 1974 Brunswick and Boatland renewed their annual dealership contract, termed "Direct Sales Contract," which made Boatland a Mercury dealer. The contract had been drawn by Brunswick and is nothing more than a printed form contract, the more pertinent provisions of which are set forth in the footnote. 1

On August 11, 1975 Brunswick mailed to Boatland a letter notifying it that the Mercury outboard motor dealership contract would not be renewed for model year 1976.

On August 20, 1975 Boatland's legal counsel replied by letter and requested that Brunswick reconsider its decision terminating Boatland's Mercury dealership, or face legal action. Brunswick acknowledged receipt of the letter five days later but gave no satisfactory response.

On August 29, 1975 Boatland and Moore filed suit against Brunswick for injunction and other relief in the Federal District Court for the Middle District of Tennessee, Nashville Division, alleging among other things Brunswick's violation of the provisions of the Wisconsin Fair Dealership Law. Jurisdiction was based on diversity of citizenship. A temporary restraining order was entered by the District Court the same day, enjoining the violation of the dealership contract.

Subsequently the District Court heard and denied plaintiffs' application for a preliminary injunction.

Plaintiffs then filed a motion for summary judgment. They alleged that the Wisconsin Fair Dealership Law determined the rights and remedies of the parties and that it was not complied with by Brunswick. Brunswick countered on December 12, 1975 by filing a cross-motion for partial summary judgment alleging among other things

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that the Wisconsin statute was inapplicable to the contract in dispute.

The District Court handed down a memorandum opinion and entered a separate order on December 22, 1975 granting Brunswick's motion. The Court held that the Wisconsin Fair Dealership Law did not apply to the dealership contract.


In a diversity case the Federal Court is bound by state substantive law wherever applicable, Erie R. R. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938), and the conflict of laws of the forum in which the court sits. Klaxon v. Stentor Elec. Mfg. Co., 313 U.S. 487, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941), and Agricultural Serv. Ass'n v. Ferry-Morse Seed Co., 551 F.2d 1057, 1063 (6th Cir. 1977). Here the forum state is Tennessee, and clearly the conflict of laws of that state applies.

The District Court in Moody v. Kirkpatrick, 234 F.Supp. 537, 540 (M.D.Tenn.1964) stated:

Tennessee follows the general rule that the validity of a contract and the substantive rights of the parties to it are to be governed by the law which the parties intended. In the absence of a manifestation of contrary intention, the parties are presumed to have contracted pursuant to the laws of the state in which the contract was entered into. Deaton v. Vise, 186 Tenn. 364, 210 S.W.2d 665 (1948).

Accord: Agricultural Serv. Ass'n, Inc. v. Ferry-Morse Seed Co., supra and the cases cited therein; Moody v. Bass, 357 F.2d 730, 732 (6th Cir. 1966); American Training Serv. v. Commerce Union Bank, 415 F.Supp. 1101, 1104 n. 3 (M.D.Tenn.1976); Hamilton Nat'l Bank of Chattanooga v. Hutcheson, 357 F.Supp. 114, 116-17 (E.D.Tenn.1973), aff'd without published opinion, sub nom. Hamilton Nat'l Bank of Chattanooga v. Meadow, 492 F.2d 1243 (6th Cir. 1974); and Sloan v. Jones, 192 Tenn. 400, 407, 241 S.W.2d 506 (1951).

The District Court in Koehler v. Cummings, 380 F.Supp. 1294, 1303 (M.D.Tenn.1974), added:

Indeed, Moak v. Continental Casualty Co., 4 Tenn.App. 287, 292 (1927) states, "The lex loci contractus becomes as much a part of the contract as if specifically incorporated therein, and, in the absence of evidence of contrary intention, the parties must be held to have contemplated the application of that law to the terms of their agreement."

In the present case the most significant contacts between the parties occurred in Wisconsin, rather than in Tennessee. The contract was entered into at Fond du Lac, Wisconsin, the situs of Brunswick's Mercury Marine Division's principal offices. All shipments of the goods under the contract were made from Wisconsin. Title to the shipped goods passed from Brunswick to Boatland in Wisconsin since all shipments were made f.o.b.

The state of Tennessee is nowhere mentioned in the form part of the contract, and the only contacts which the parties had with Tennessee were the location of Boatland's place of business, where the outboard motors were resold and...

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