Carolina Furniture Co., Inc. v. Rhodes, Inc.

• Decision Date: 19 November 1984
• Docket Number: Civ. A. No. CV181-158.
• Parties: CAROLINA FURNITURE COMPANY, INC., Plaintiff, v. RHODES, INC. and Kincaid Furniture Company, Incorporated, Defendants.
• Court: U.S. District Court — Southern District of Georgia

603 F. Supp. 69

CAROLINA FURNITURE COMPANY, INC., Plaintiff, v. RHODES, INC. and Kincaid Furniture Company, Incorporated, Defendants.

Civ. A. No. CV181-158.

United States District Court, S.D. Georgia, Augusta Division.

November 19, 1984.

COPYRIGHT MATERIAL OMITTED

J. Patrick Claiborne, William J. Cooney, H. William Sams, Jr., Augusta, Ga., for plaintiff.

John A. Chandler and James R. McGibbon, David E. Hudson, Augusta, Ga., John M. Murchison, Jr., Charlotte, N.C., for defendants.

ORDER ON DEFENDANTS' MOTIONS FOR SUMMARY JUDGMENT

BOWEN, District Judge.

Plaintiff Carolina Furniture Company, Inc. (hereinafter "Carolina") owns and operates a retail furniture store in Augusta, Georgia. Defendant Rhodes, Inc. (hereinafter "Rhodes") owns and operates a number of retail furniture stores, including one store located in Augusta, Georgia. Defendant Kincaid Furniture Company, Incorporated (hereinafter "Kincaid") is a manufacturer of furniture with its principal place of business in Hudson, North Carolina.

Plaintiff's complaint is composed of three counts. In Count I, plaintiff alleges that the defendants conspired with each other and with other Kincaid distributors to restrain trade and commerce in violation of Section 1 of the Sherman Act (15 U.S.C. § 1). Counts II and III relate only to defendant Rhodes. In Count II, plaintiff alleges that defendant Rhodes, knowingly and maliciously and with intent to injure the plaintiff, interfered with plaintiff's contract to purchase the Kincaid line of furniture from defendant Kincaid and from other Kincaid distributors. In Count III plaintiff alleges that Rhodes engaged in a deceptive trade practice in violation of the Georgia Uniform Deceptive Trade Practices Act (Ga.Code Ann. § 10-1-372(a)(8)), when, in the course of its business, it disparaged the goods, services, and business of plaintiff by false and misleading representations of fact. Both defendants to this action have filed motions for summary judgment that are ripe for adjudication.

Before reaching the merits of the defendants' motions, the limited scope of this Court's inquiry must be clearly defined. Summary judgment may only be entered if it is apparent that "there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Rule 56(c), Fed.R.Civ.P.

The party seeking summary judgment bears the exacting burden of demonstrating that there is no actual dispute as to any material fact in the case. Adickes v. S.H. Kress & Co., 398 U.S. 144, 157, 90 S.Ct. 1598, 1608, 26 L.Ed.2d 142 (1970); Environmental Defense Fund v. Marsh, 651 F.2d 983, at 990-91 (5th Cir.1981). In assessing whether the movant has met this burden, the courts should view the evidence introduced and all factual inferences from that evidence in the light most favorable to the party opposing the motion. Id. All reasonable doubts about the facts should be resolved in favor of the non-moving litigant. Casey Enterprises v. American Hardware Mutual Insurance Co., 655 F.2d 598 at 602 (5th Cir.1981). A court must not decide any factual issues it finds in the record, but if such are present, the court must deny the motion and proceed to trial. Environmental Defense Fund v. March, 651 F.2d at 991; Lighting Fixture & Electric Supply Co. v. Continental Insurance Co., 420 F.2d 1211, 1213 (5th Cir.1969). Summary judgment may be inappropriate even where the parties agree on the basic facts, but disagree about the factual inferences that should be drawn from these facts. Id. If reasonable minds might differ on the inferences arising from undisputed facts, then the court should deny summary judgment. Croley v. Matson Navigation Co., 434 F.2d 73, 75 (5th Cir.1970); Marsden v. Patane, 380 F.2d 489, 491 (5th Cir.1967).

Impossible Electronics Techniques, Inc. v. Wackenhut Protective System, Inc., 669 F.2d 1026, 1031 (5th Cir. Unit B 1982).

Although summary judgment is not inapplicable to antitrust cases, the Supreme Court has noted that

summary procedures should be used sparingly in complex antitrust litigation where motive and intent play leading roles, the proof is largely in the hands of the alleged conspirators, and hostile witnesses thicken the plot. It is only when the witnesses are present and subject to cross-examination that their credibility and the weight to be given their testimony can be appraised.

Poller v. Columbia Broadcasting System, 368 U.S. 464, 473, 82 S.Ct. 486, 491, 7 L.Ed.2d 458 (1962). In light of the governing standards as set forth above and having acknowledged "that summary judgment is extreme relief which should be approached very cautiously," Parsons v. Ford Motor Co., 669 F.2d 308, 312 (5th Cir.1982), I will now address the defendants' motions.

FINDINGS OF FACT

Based on the defendants' statements of undisputed material facts and the plaintiff's responses thereto, the following facts emerge as undisputed:

1. Plaintiff Carolina bought furniture manufactured by Kincaid directly from Kincaid for a period beginning in the summer of 1979 and ending in the spring of 1980.

2. Carolina's furniture store is located in Augusta, Georgia. A furniture showroom owned and operated by defendant Rhodes is also located in Augusta, Georgia.

3. Pretermitting the issue of whether Kincaid had, prior to the time that Carolina began to buy Kincaid furniture directly from Kincaid, made a commitment to sell certain groups of its furniture to Rhodes on an exclusive or semi-exclusive basis, Rhodes believed that Kincaid sold to Carolina furniture in the furniture groups promised to Rhodes on an exclusive or semi-exclusive basis.

4. At the time Carolina was a direct customer of Kincaid, Carolina always purchased furniture from Kincaid and paid by check, and always sought and received delivery of the furniture it bought at Kincaid's factory in Hudson, North Carolina.

5. Although Carolina's credit rating was modified as of May 18, 1981, at all times relevant to this suit, Carolina's credit rating with Lyons — an independent credit reporting publication widely used in the furniture industry — was a 13-9 rating. Under the Lyons' system, "13" means "inquire for report," and "9" means "claims to buy always for cash."

6. Carolina operated its business out of a metal, prefabricated building with few windows, no display windows and cement floors.

7. Carolina did not, during the period it was a direct customer of Kincaid, and at all other times material and relevant herein, display Kincaid furniture in room-like settings with appropriate accessories.

8. Immediately prior to the time he ordered that further direct sales of Kincaid furniture from Kincaid's factory to Carolina cease, Steve Kincaid, Kincaid's Executive Vice-President, viewed a number of pictures of the exterior and interior of Carolina's Augusta furniture store.

9. When it takes on a new customer, Kincaid prefers that that customer be a leading retailer in its (the putative customer's) marketing area, that is, the customer should be able and willing to advertise, display and adequately stock Kincaid furniture.

10. At all times relevant and material herein, Rhodes has had no contact whatsoever, with regard to Carolina, with any of the other Kincaid customers who have refused to sell Kincaid furniture to Carolina.

11. Carolina, Rhodes and the other Kincaid customers that Carolina alleges will not sell Kincaid furniture to it as a result of pressure from Kincaid are sellers and not manufacturers of furniture.

12. Following Kincaid's refusal to sell Kincaid furniture to Carolina, Carolina has not gone out of business.

13. Following Kincaid's refusal to sell Kincaid furniture to Carolina, Carolina has substituted other lines of furniture in place of Kincaid's furniture. Moreover, Carolina still has some access to Kincaid furniture.

14. Plaintiff Carolina was not obligated to purchase any furniture from defendant Kincaid, nor was Kincaid obligated to supply any furniture to plaintiff, and plaintiff's sole relationship with defendant Kincaid was to purchase furniture on an "as-ordered" basis.

15. Rhodes had no knowledge of any alleged contractual relationship between plaintiff and defendant Kincaid.

16. No allegedly disparaging statements made by any Rhodes employee were put into writing.

17. No Rhodes officials directed or authorized any disparaging remarks by any of Rhodes' sales employees or other employees.

An examination of the record indicates that one further fact is not legitimately in dispute. Although plaintiff Carolina asserts in its response to Kincaid's statement of undisputed material facts that a genuine issue of fact exists as to whether Kincaid and Rhodes entered into their agreement, whatever the substance of that agreement might have been, prior to the time that Carolina began to buy Kincaid furniture directly from Kincaid in July of 1979, it appears that plaintiff's assertion is founded on an error made by Rhodes in an interrogatory answer. That error has been corrected, and plaintiff has cited no independent facts to suggest than an understanding under which Rhodes was to buy Kincaid furniture was not entered into prior to the time that Carolina began to buy Kincaid furniture directly from Kincaid. (See Deposition of George Alden Thornton, III, at 45-46; Rhodes' Supplemental Response to Plaintiff's Second Interrogatory No. 3.)

CONCLUSIONS OF LAW

A. PLAINTIFF'S ANTITRUST CLAIM

In its brief in opposition to the defendants' motions for summary judgment, the plaintiff characterizes its antitrust claim:

Plaintiff's action is based on the theory that the concerted refusal of Kincaid and certain other North Carolina wholesalers to sell to plaintiff, as a result of pressure from defendant Rhodes is a group boycott and constitutes a per se violation of Section 1 of the Sherman Act, 15 U.S.C. § 1. It is a horizontal restraint for businessmen on the same distribution level to conspire to refuse to sell to a particular customer.

Thus, plaintiff...