Bell v. Speed Queen

• Decision Date: 11 March 1969
• Docket Number: No. 17137.,17137.
• Citation: 407 F.2d 1022
• Parties: Jule BELL, d/b/a Bell Appliance Parts, Plaintiff-Appellant, v. SPEED QUEEN, a division of McGraw-Edison Co., Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

407 F.2d 1022 (1969)

Jule BELL, d/b/a Bell Appliance Parts, Plaintiff-Appellant, v. SPEED QUEEN, a division of McGraw-Edison Co., Defendant-Appellee.

No. 17137.

United States Court of Appeals Seventh Circuit.

March 11, 1969.

Albert C. Hand, Ronald K. Gehring, Hammond, Ind., for appellant.

Ronald J. Clark, Chicago, Ill., Charles G. Bomberger, Hammond, Ind., Edward R. Johnston, Chicago, Ill., for appellee, Jenner & Block, Chicago, Ill., of counsel.

Before DUFFY, Senior Circuit Judge, and SWYGERT and KERNER, Circuit Judges.

PER CURIAM.

Jule Bell, doing business as Bell Appliance Parts, brought an action against Speed Queen, a division of McGraw-Edison Company, seeking damages based on breach of contract, fraud, and conspiracy in restraint of trade. The district judge granted summary judgment for Speed Queen. We affirm and adopt as the opinion of this court the memorandum opinion of the district judge which follows in the appendix.

APPENDIX

Plaintiff, Jule L. Bell d/b/a Bell Appliance Parts brought this action to recover for breach of contract, fraud, and conspiracy. The complaint alleges a contract between plaintiff and defendant's predecessor constituting the plaintiff a wholesale parts distributor of Speed Queen appliance parts, which contract the plaintiff claims to have fulfilled in all respects. It also alleges that defendant's agents represented to the plaintiff that the contract would continue indefinitely when they knew that it would not and that plaintiff relied on those representations to his detriment in that he was induced to deal almost exclusively in defendant's products. Count II of the complaint alleges that defendant and defendant's wholesale dealers entered into a conspiracy to deprive plaintiff of the opportunity to obtain the necessary parts for his business on the same terms as others engaged in the business.

Based on the affidavits submitted by plaintiff and defendant and plaintiff's answers to interrogatories, certain facts are undisputed. The original contract in question was consummated by an exchange of letters between defendant's predecessor and Jule F. Bell, Bell Appliance Shop. Jule F. Bell wrote to Speed Queen expressing a desire to become a wholesale distributor of parts, and Speed Queen replied, consenting to the arrangement and sending him a list of inventory. This exchange took place in 1949 and nothing was said about the duration of the contract. Then on June 1, 1964, plaintiff Jule L. Bell, d/b/a Bell Appliance Parts became the contract purchaser of the wholesale appliance business from Jule F. Bell, d/b/a Bell Appliance Shop.

According to the affidavit of plaintiff, defendant at all times recognized him "as doing business as Bell Appliance Parts a part of Bell Appliance Shop." The affidavit further states that defendant induced him to expand his business by representing that the distributorship would continue indefinitely and by not warning him of the impending change in the distributorship policy.

Defendant, however, contends that it knew nothing of the assignment of the business and did not consent thereto. In paragraph 12 of the affidavit of John B. Murray, he states that defendant never received notice of the assignment and it never approved the assignment. The affiant further stated that no agent of the defendant was ever authorized to represent, and to their knowledge no one ever did represent, that the contract would last indefinitely. Further, defendant points out plaintiff's answers to interrogatories gave no definite indication as to what representations were made other than that they took the form of rules as to the adequacy of inventory, etc.

As to the assignment of the contract and the confusion over the identity of the parties, the court takes note of the fact that the names of the plaintiff and his assignor are the same except for the middle initial, the names of the business are the same except for the final word, and that based on the admissions of counsel and the letters in the file, both businesses were at all times conducted from the same address. It also notes that plaintiff's affidavit states that Bell Appliance Parts was "a part of Bell Appliance Shop." It therefore finds that there is no substantial issue of material fact as to the notice of assignment, and that defendant did not have actual notice of such assignment at the time of the events in question. The course of dealing relied upon by plaintiff is not sufficient under the circumstances to create an issue of fact in the face of defendant's affidavit.

The cause of plaintiff's termination is clearly set out in defendant's affidavit. It is shown that in the latter part of 1964 Speed Queen reviewed its parts distribution policy and decided to terminate distribution through outlets which were both retail dealers in appliances and wholesale distributors of parts. This decision was based on the legitimate business judgment of defendant and, according to the affidavit, it was reached without consultation or agreement with either the wholesale or wholesale-retail dealers involved. Pursuant to this business decision, the wholesale distributorships of all dealers who were both retailers and wholesale distributors of parts, according to the defendant's records, were terminated. Thus, plaintiff's distributorship, that is, his right to obtain parts at the same discount afforded wholesale distributors, was cancelled.

With regard to the allegation of conspiracy, the defendant's affidavit states that no other distributor was consulted or had any voice in the decision to terminate the distributorship of retailer-wholesalers.

Plaintiff cannot recover for breach of contract. First, there is a question as to whether defendant ever contracted with this plaintiff or whether the contract could be validly assigned without the express consent of defendant. But even assuming that there was a valid assignment of the contract, Indiana law provides that a contract providing for continuing performance and which has no termination date, or which provides that it will last indefinitely, is terminable at will by either party. In the recent case of Monon R.R. v. New York Central R.R., 227 N.E.2d 450, 456 (Ind.App.1967) involving the termination of the agreement between two railroads to maintain a joint station, the court said:

There being no conflict in the evidence, we are of the opinion that under the law applicable to contracts in our state, a contract which contains no specific termination date is terminable by the parties thereto at will.

There, the defendant gave the plaintiff only thirty days notice of a termination of a contract which had lasted more than fifty years. In Miller v. Ortman, 235 Ind. 641, 136 N.E.2d 17, 33 (1956), dealing with a distribution contract, the court said:

And, as to the termination of appellant\'s contract as distributor for the "Corporation," it is admitted that there was no formal agreement relative thereto between the "Corporation" and "Midwest" and that any oral agreement between the parties was indefinite as to time and territory.

Therefore, it was within the power of the "Corporation" to terminate the distributorship contract as to future orders at its will.

Likewise in International Shoe Co. v. Lacy, 114 Ind.App. 641, 53 N.E.2d 636 (1944) and Grimm v. Baumgart, 121 Ind.App. 626, 96 N.E.2d 915, rehearing denied, 97 N.E.2d 871 (1951) the courts said that exclusive agency contracts which contained no date or method of termination were terminable at will, or unenforceable for lack of mutuality. See Grand Lodge Hall Association v. Moore, 224 Ind. 575, 70 N.E.2d 19, 22, 173 A.L.R. 6 (1945), aff'd per curiam, 330 U.S. 808, 67 S.Ct. 1088, 91 L.Ed. 1265 (1947); Uniform Commercial Code § 2-309(2). Annot., Distributorship Contract — Termination, 19 A.L.R.3d 196 (1968).

The court has examined the cases cited by plaintiff and found them to be inapplicable. At most, they stand for the proposition that a contract may be changed or extended by parol agreement or conduct of the parties. Plaintiff claims that this contract was so changed to provide for indefinite duration. However, even if the contract had expressly provided for an indefinite duration, or for its perpetual continuance, it would have been terminable at will by either party. The court therefore finds that the contract was...