Bushwick-Decatur Motors v. Ford Motor Co.

• Decision Date: 18 January 1940
• Docket Number: No. 256.,256.
• Citation: 30 F. Supp. 917
• Parties: BUSHWICK-DECATUR MOTORS, Inc., v. FORD MOTOR CO.
• Court: U.S. District Court — Eastern District of New York

30 F. Supp. 917

BUSHWICK-DECATUR MOTORS, Inc., v. FORD MOTOR CO.

No. 256.

District Court, E. D. New York.

January 18, 1940.

Hurd, Hamlin & Hubbell, of New York City (Edward E. Weadock, of New York City, of counsel), for defendant, for the motion.

Daru, Hellman & Winter, of New York City (Oswald Vischi and Daniel S. Levy, both of New York City, of counsel), for plaintiff, opposed.

CAMPBELL, District Judge.

This is a motion for Summary Judgment, pursuant to Rule 56(b) of the Rules of Civil Procedure, 28 U.S.C.A. following section 723c, in favor of defendant against plaintiff, dismissing the amended complaint, and for such other and further relief, as to the Court may seem just and proper.

This is an action brought by the plaintiff against defendant, Ford Motor Company, to recover damages for the alleged wrongful termination and cancellation of a so-called automobile and "dealership contract" between the parties, and for a breach of certain other alleged related agreements.

This action was instituted in the Supreme Court of the State of New York, Queens County, but was duly removed to this Court, as to the defendant, Ford Motor Company.

The first cause of action against defendants other than Ford Motor Company alleged conspiracy to interfere with plaintiff's contractual rights, and was not removed to this Court.

The action pending in this Court consists of the second, third, fourth and fifth alleged causes of action of the amended complaint, and this motion, made by the defendant, for a Summary Judgment, dismissing the amended complaint, is directed to each of said causes of action.

The action pending in this Court is at issue, but has not been noticed for trial.

Briefly stated, the causes of action pending in this Court are as follows:

In the second cause of action, it is alleged that on or about December 12th, 1933, plaintiff's assignor entered into a contract with defendant, which is described in the amended complaint as a "dealership contract", and identified in the Bill of Particulars as "Sales Agreement" by which title I will hereafter refer to it; that on or about January 18th, 1934, said Sales Agreement was assigned to plaintiff with the consent of the defendant; that plaintiff performed all of the obligations upon its part under said contract to be performed, and that on or about September 14th, 1937, defendant arbitrarily, wrongfully, contrary to the custom of the trade, and contrary to its own practice, terminated and cancelled the Sales Agreement in bad faith, to plaintiff's damage in the sum of $200,000.

In the third cause of action plaintiff repeats the allegations with respect to the making, assignment and performance of the Sales Agreement, and further alleges that in consideration of plaintiff's agreement to invest further sums of money in building up its business, it was mutually agreed that the said Sales Agreement should not be cancelled by Ford Motor Company, "except for a just and proper cause and upon adequate hearing first being given to the plaintiff"; that subsequently, without just cause, and without adequate opportunity to plaintiff to be heard, defendant cancelled the said Sales Agreement, to plaintiff's damage in the sum of $200,000.

In the fourth cause of action there are repeated the allegations of the second cause of action, with respect to the Sales Agreement, and the further allegations that in consideration of the execution of the said Sales Agreement, defendant promised to allot to the plaintiff a more profitable territory, as soon as such more profitable territory should become available, and that defendant failed, and refused to allocate such territory, although it did become available in the County of Queens, all to the plaintiff's damage in the sum of $50,000.

In the fifth cause of action it is alleged that said Sales Agreement gave defendant, upon termination thereof, the option to repurchase from plaintiff all of defendant's products in plaintiff's hands at the time of termination, and that upon the termination of this agreement, defendant exercised such option to repurchase, but thereafter failed, and refused to repurchase, all to plaintiff's damage in the sum of $25,000.

In the amended answer, the making of the Sales Agreement, and its assignment to plaintiff, is admitted, but the wrongful termination thereof, and the making of the alleged agreements set forth in the third, fourth and fifth causes of action, is denied. Several affirmative defenses are alleged in the amended answer as well as a small counterclaim, but they are not relevant on this motion.

The Sales Agreement, as made between the defendant described as the "Company", and plaintiff's assignor described as the "Dealer", provided as follows:

Article (1) provided: "Company agrees to sell and Dealer agrees to purchase Ford automobiles, trucks, chassis, automobile bodies, pick-up bodies, truck bodies, cabs, accessories and parts (hereinafter sometimes collectively referred to as Company's `Products') upon the terms, conditions and provisions hereinafter specifically set forth and subject to the right reserved to Company to sell to other Dealers and direct to retail purchasers in any part of the United States without obligations for any commission to Dealer on any such sale."

Article (2) provided that the Company would sell its products to the Dealer at such prices as it fixes from time to time.

Article (3) required the payment by Dealer of additional charges for freight and packing.

Article (4) required in effect the payment of taxes by Dealer.

Article (5) provided: "`List Prices' of all Ford products shall be subject to change at any time and from time to time without obligation on Company to adjust with Dealer as to price of any product shipped, or paid for but not in transit, at the time such price change becomes effective."

Article (6) related to the title to products until date of payment by Dealer to Company.

Article (7) covered several matters, among others, including the place and manner in which Dealer shall maintain its business, demonstrators, retail buyer's order and deposit, the effect of termination on orders at hand, repair parts, advertising, Company's trademark and patents.

Article (8) required the Dealer to give accurate and timely reports of its business every ten days.

Articles (9), (10), and (11) provided:

"(9) (a) Dealer will furnish Company on Company forms, prior to December 31st of each year, an estimate of the number of Ford automobiles, trucks, cabs and chassis that Dealer will purchase from Company during each month of the succeeding year. Company agrees to give careful consideration to such estimates, but expressly reserves the right to follow or depart from such estimates according to its discretion. Company shall in no way be liable for any delay in shipments, however caused, nor for shipments over other than specified route."

(b) (Omitted because not material here.)

"(c) This agreement may be terminated at any time at the will of either party by written notice to the other party given either by registered mail or by personal delivery, and such termination shall also operate to cancel all orders theretofore received by Company and not delivered.

"(d) Upon termination of this agreement Company may, at its option, repurchase from Dealer all or any part of Company's products in Dealer's possession, and Dealer agrees to sell such products to Company at the price paid therefor plus freight but less any liens or encumbrances thereon. And Dealer hereby grants Company the right to enter the premises of Dealer upon termination of this agreement and to take possession of all or any part of said products upon tender of the purchase price thereof, determined as above.

"(e) This is a Michigan Agreement and shall be construed according to the laws of the State of Michigan. If any provision of this agreement is held to be invalid or unenforceable, this contract shall as to such provision be considered divisible and the balance of the agreement shall be valid and binding.

"(f) This agreement may not be assigned by Dealer without written consent of Company.

"(g) If prior to the date hereof a sales agreement shall have been in effect between the parties hereto, the Company and Dealer agree, each in consideration of release by the other from the obligations and rights thereunder existing, that such prior sales agreement is hereby terminated and cancelled, and after the date hereof all the rights and obligations of the parties hereto shall be governed and controlled exclusively by this agreement.

"(h) The terms of this agreement may not be enlarged, varied, modified or cancelled by any agent or representative of Company, except by an instrument in writing executed by the President, Vice President, Secretary, or Assistant Secretary of Company, and Company will not be bound by any alleged enlargement, variation, modification, or agreement not so evidenced.

"(10) As a condition precedent to the Company entering into this agreement, the Dealer represents and warrants that he has carefully read over each and every part of this agreement, and understands each and every term thereof; and further represents and warrants that no representations or statements have been made to him by the Company or its officers, agents, employees or representatives, which would in any way tend to add to, modify or change the terms, or any one or more of them, of this agreement.

"(11) This agreement shall not bind Company until it is signed by either its President, Vice President, Secretary or Assistant Secretary."

To the moving affidavits is attached a photostatic copy of the Sales Agreement, identified by plaintiff's Bill of Particulars, and also a photostatic copy of the written assignment thereof to plaintiff, and said affidavits allege that during the period referred to in the amended complaint the following persons occupied the following offices in defendant; Edsel B. Ford,...