Bowshier v. Chrysler Financial Corp.

• Decision Date: 26 March 2001
• Docket Number: No. C-3-98-358.,C-3-98-358.
• Parties: Jack A. BOWSHIER, et al., Plaintiffs, v. CHRYSLER FINANCIAL CORPORATION, et al., Defendants.
• Court: U.S. District Court — Southern District of Ohio

144 F.Supp.2d 919

Jack A. BOWSHIER, et al., Plaintiffs, v. CHRYSLER FINANCIAL CORPORATION, et al., Defendants.

No. C-3-98-358.

United States District Court, S.D. Ohio, Western Division.

March 26, 2001.

COPYRIGHT MATERIAL OMITTED

Stanley Morganstern, Cleveland, OH, for plaintiffs.

Janice M. Paulus, Cleveland, OH, Terence L. Fague, Dayton, OH, Mary P. Cormier, Cambridge, MA, John A. Houlihan, Scott A. King, Dayton, OH, Mark F. Kennedy, Cleveland, OH, Michael W. Krumholtz, Dayton, OH, for defendants.

DECISION AND ENTRY SUSTAINING DEFENDANT CHRYSLER FINANCIAL CORPORATION'S MOTION FOR SUMMARY JUDGMENT (DOC. # 81)

RICE, Chief Judge.

This litigation arises from the attempts of Plaintiffs Jack A. Bowshier and Linda L. Bowshier to repurchase the assets and franchise of Hitchcock Auto Group, Inc. ("HAG") and George W. Hitchcock ("Hitchcock"). As stated in their Amended Complaint, Plaintiffs own the real property, known as 4815 Urbana Road, located in Springfield, Ohio, subject to a mortgage held by Defendant Chrysler Financial Corporation ("CFC"), formerly known as Chrysler Credit Corporation. In January, 1994, Plaintiffs (and Plaintiffs' corporation, Jack Bowshier Buick-GMC-AMC-Jeep-Renault, Inc. ("Bowshier Buick")) entered into two agreements with HAG and Hitchcock, by which HAG would lease the property, for use as an automobile dealership, and purchase the assets of Plaintiffs' corporation (See Lease; "Buy/ Sell Agreement" # 1). CFC financed HAG's purchase of Bowshier Buick's personal property and possesses a security interest in those assets. In addition, HAG gave to Bowshier Buick a purchase money security interest in all of the assets purchased by HAG.¹ These security interests were allegedly subordinated to CFC.²

On December 17, 1997, HAG entered into an agreement with Jack Bowshier to sell him HAG's personal property, which was used to operate the automobile dealership, as well as HAG's franchise rights (Buy/Sell Agreement # 2). This agreement was delivered to Defendant Chrysler Corporation ("Chrysler"), in accordance with Ohio Rev.Code § 4517.56. On May 28, 1998, Chrysler notified Mr. Bowshier that it refused to approve the transfer of the Hitchcock Jeep-Eagle franchise to him.

On July 7, 1998, HAG entered into an agreement with Linda Bowshier, in which she would purchase HAG's assets and certain franchise rights (Buy/Sell Agreement # 3). On June 7, 1998, Mrs. Bowshier submitted an application to Chrysler for approval of the transfer of the franchise, and, on July 17 and July 29, 1998, she notified that company of the name and address of her proposed management personnel.

According to CFC, by the Fall of 1997, HAG was having difficulty keeping current with its obligations to CFC under the terms of its Note and Security Agreement, arising from Buy/Sell Agreement # 1. By July 1, 1998, HAG owed CFC more than $1,654,475. Due to HAG's default, CFC sent a demand letter to HAG for the total amount due and owing to it. In response, HAG voluntarily surrendered its assets (i.e., the collateral for CFC's loan) to CFC. On July 16, 1998, CFC entered the subject property (4815 Urbana Road) and took possession of HAG's personal property. In August of 1998, CFC, as the creditor in possession, arranged for the sale of those assets to Stapleton Chrysler-Plymouth-Dodge-Jeep-Eagle, Inc. ("Stapleton Chrysler") and Bill Marine Auto Center, Inc. ("Bill Marine Auto").

In their Amended Complaint (Doc. # 11), Plaintiffs brought claims against CFC, Chrysler, HAG, Hitchcock, Stapleton Chrysler, Charles D. Stapleton ("Stapleton"), Bill Marine Auto, and Bill D. Marine ("Marine").³ Plaintiffs have subsequently voluntarily dismissed Stapleton Chrysler and Stapleton (Doc. # 105), as well as Hitchcock and HAG (Doc. # 115), from this litigation. As for the remaining four Defendants (CFC, Chrysler, and the Marine Defendants), Plaintiffs have set forth a number of state law claims for relief (Doc. # 11), to wit:

A. claims that Plaintiffs will suffer irreparable harm if CFC and Chrysler complete the disposal of personal property and the transfer of the Jeep-Eagle franchise to persons other than Plaintiffs (Counts One, Two and Three);

B. a claim against CFC for interference with Plaintiffs' personal property rights (Count Four);

C. a claim against CFC for violating Plaintiffs' right to redeem collateral, pursuant to Ohio Rev.Code § 1309.49 (Count Five);

D. a claim against CFC for tortious interference with Linda Bowshier's business interests in the assets of HAG by disposing of those assets without Plaintiffs' consent (Count Six);

E. a claim against Chrysler for failing to reject the transfer to Jack Bowshier in a timely manner (Count Seven);

F. a claim against Chrysler for rejecting Jack Bowshier's application without good cause (Count Eight);

G. a claim against Chrysler for failing to reject Linda Bowshier's application in a timely manner (Count Nine);

H. a claim against Chrysler for tortious interference and violations of Ohio Rev.Code § 4517.56 (Count Ten);

I. a claim against CFC and Chrysler for tortious interference, based on the disposal of assets prior to ruling on Linda Bowshier's application (Count Eleven);

J. a claim against CFC for orchestrating Plaintiffs' default on their real estate mortgage (Count Twelve);

K. a claim against CFC for tortious interference with Plaintiffs' business relationship with Nissan Motor Corporation, by disposing of Nissan assets (Count Thirteen);

L. a claim against CFC and the Stapleton Defendants for civil conspiracy, based on tortious interference with Plaintiffs' transactions with Hitchcock and HAG, pursuant to the Buy/Sell Agreements # 2 and # 3 (Count Fourteen);

M. a claim against CFC and the Marine Defendants for civil conspiracy, based on tortious interference with Plaintiffs' transactions with Hitchcock and HAG, pursuant to the Buy/Sell Agreements # 2 and # 3 (Count Sixteen);

N. a claim against CFC for nonpayment of rent (Count Eighteen).

Pending before the Court is CFC's Motion for Summary Judgment (Doc. # 81).⁴ For the reasons assigned, that Motion is SUSTAINED. As a means of analysis, the Court will first set forth the standard governing CFC's Motion, and then turn the merits of same.

I. Standard for Motions for Summary Judgment

Summary judgment must be entered "against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Of course, the moving party:

always bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any," which it believes demonstrate the absence of a genuine issue of material fact.

Id. at 323, 106 S.Ct. 2548; see also Boretti v. Wiscomb, 930 F.2d 1150, 1156 (6th Cir. 1991) (The moving party has the "burden of showing that the pleadings, depositions, answers to interrogatories, admissions and affidavits in the record, construed favorably to the nonmoving party, do not raise a genuine issue of material fact for trial.") (quoting Gutierrez v. Lynch, 826 F.2d 1534, 1536 (6th Cir.1987)). The burden then shifts to the nonmoving party who "must set forth specific facts showing that there is a genuine issue for trial." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) (quoting Fed.R.Civ.P. 56(e)). Thus, "[o]nce the moving party has met its initial burden, the nonmoving party must present evidence that creates a genuine issue of material fact making it necessary to resolve the difference at trial." Talley v. Bravo Pitino Restaurant, Ltd., 61 F.3d 1241, 1245 (6th Cir.1995). Read together, Liberty Lobby and Celotex stand for the proposition that a party may move for summary judgment by demonstrating that the opposing party will not be able to produce sufficient evidence at trial to withstand a directed verdict motion (now known as a motion for judgment as a matter of law. Fed.R.Civ.P. 50). Street v. J.C. Bradford & Co., 886 F.2d 1472, 1478 (6th Cir.1989).

Once the burden of production has so shifted, the party opposing summary judgment cannot rest on its pleadings or merely reassert its previous allegations. It is not sufficient to "simply show that there is some metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986); see also Michigan Protection and Advocacy Serv., Inc. v. Babin, 18 F.3d 337, 341 (6th Cir. 1994) ("The plaintiff must present more than a scintilla of evidence in support of his position; the evidence must be such that a jury could reasonably find for the plaintiff."). Rather, Rule 56(e) "requires the nonmoving party to go beyond the [unverified] pleadings" and present some type of evidentiary material in support of its position. Celotex Corp., 477 U.S. at 324 106 S.Ct. 2548. Summary judgment "shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). Summary judgment shall be denied "[i]f there are ... `genuine factual issues that properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party.'" Hancock v. Dodson, 958 F.2d 1367, 1374 (6th Cir.1992) (citation omitted). Of course, in determining whether a genuine issue of material fact exists, a court must assume as true the evidence of the nonmoving party and draw all reasonable inferences in the favor of that party. Anderson, 477 U.S. at 255, 106 S.Ct. 2505 (emphasis added). If ...