Dreiling v. Peugeot Motors of America, Inc.

• Decision Date: 28 June 1988
• Docket Number: 85-2628 and 85-2735,85-1880,Nos. 85-1823,s. 85-1823
• Parties: 1988-2 Trade Cases 68,125 Lloyd J. DREILING and Steven J. Dreiling, Plaintiffs, L.J. Dreiling Motor Company, Inc., a Colorado corporation, Plaintiff-Appellant/Cross-Appellee, Podoll & Podoll; Richard B. Podoll; Burns & Figa; Hugh A. Burns and Phillip S. Figa, Appellants/Cross-Appellees, v. PEUGEOT MOTORS OF AMERICA, INC., a Delaware corporation, Defendant-Appellee/Cross-Appellant, Automobile Peugeot, a French corporation; Peugeot, S.A., a French corporation and Chrysler Corporation, a Delaware corporation, Defendants-Appellees.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 1373

850 F.2d 1373

1988-2 Trade Cases 68,125

Lloyd J. DREILING and Steven J. Dreiling, Plaintiffs L.J. Dreiling Motor Company, Inc., a Colorado corporation Plaintiff-Appellant/Cross-Appellee Podoll & Podoll; Richard B. Podoll; Burns & Figa; Hugh A Burns and Phillip S. Figa, Appellants/Cross-Appellees, v. PEUGEOT MOTORS OF AMERICA, INC., a Delaware corporation, Defendant-Appellee/Cross-Appellant, Automobile Peugeot, a French corporation; Peugeot, S.A., a French corporation and Chrysler Corporation, a Delaware corporation, Defendants-Appellees.

Nos. 85-1823, 85-1880, 85-2628 and 85-2735.

United States Court of Appeals, Tenth Circuit.

June 28, 1988.

Rehearing Denied July 27, 1988.

Richard B. Podoll of Podoll & Podoll, pro se.

Phillip S. Figa (Hugh A. Burns with him on the briefs) of Burns & Figa, Denver, Colo., pro se.

Philip E. Johnson (Morris B. Hoffman with him on the brief) of Mosley, Wells, Johnson & Ruttum, Denver, Colo., for Peugeot Motors of America, Inc.

John B. Moorhead (Timothy R. Beyer with him on the brief) of Baker & Hostetler, Denver, Colo., for Chrysler Corp.

Before LOGAN, BARRETT, and TIMBERS ^*, Circuit Judges.

LOGAN, Circuit Judge.

In 1981, Peugeot Motors of America, Inc. terminated the franchise of L.J. Dreiling Motor Co., Inc. (Dreiling) on the asserted ground that Dreiling had submitted approximately $32,000 worth of fraudulent warranty claims. Shortly thereafter Dreiling sued, seeking damages for this termination on antitrust and other grounds. On November 1, 1982, the district court dismissed Dreiling's claim under the Automobile Dealers Day in Court Act (the Dealers Act), 15 U.S.C. Secs. 1221-1225, that Peugeot ¹ failed to act in good faith in terminating Dreiling's dealership. Dreiling later amended its complaint to add Chrysler as a defendant; and soon thereafter it filed a fourth and final amended complaint asserting that the fraudulent warranty submissions were "merely a pretext, and in fact [Peugeot] engineered or participated in the creation of their ground for termination," and that the termination actually was part of a nationwide conspiracy between Peugeot and Chrysler Corporation (Chrysler) to replace existing Peugeot dealers with Chrysler dealers. Plaintiff's Fourth Verified Amended Complaint, II Supp. R. Tab 21, at 12. The complaint alleged that (1) Peugeot breached its contract with Dreiling; (2) Chrysler tortiously interfered with Dreiling's and Peugeot's contractual relations; (3) Peugeot and Chrysler violated Sec. 1 of the Sherman Act, 15 U.S.C. Sec. 1, by agreeing to restrain trade; and (4) Peugeot and Chrysler violated Sec. 2 of the Sherman Act, 15 U.S.C. Sec. 2, and Sec. 7 of the Clayton Act, 15 U.S.C. Sec. 18, by merging unlawfully.

In 1985 the district court granted defendants' motion for summary judgment on all claims, L.J. Dreiling Motor Co. v. Peugeot Motors of America, Inc., 605 F.Supp. 597 (D.Colo.1985), and subsequently ordered Dreiling and its attorneys to pay Chrysler's attorney fees. Dreiling has appealed the summary judgment, arguing that the trial court denied sufficient opportunity for discovery, and that genuine issues of fact remained with respect to the Dealers Act claim and the claims contained in the fourth verified complaint. Dreiling and its attorneys also assert that the trial court abused its discretion in granting Chrysler attorney's fees against Dreiling and the attorneys personally. Peugeot on cross-appeal claims that the court erred in denying its motion for attorney's fees.

I Adequacy of Discovery

Dreiling first argues that the "Opinion of the District Court unfairly granted summary judgment after extremely limited discovery." Dreiling's Opening Brief at 15. Defendants vigorously contest Dreiling's characterization of the extent of discovery; this characterization also is at odds with the district court's finding:

"Discovery has been extensive. Plaintiffs served hundreds of written interrogatories and requests for production of documents on Peugeot. Seventeen depositions have been taken, ten by Dreiling and seven by Peugeot. At the preliminary injunction hearing on June 26, 1981, ten witnesses testified for about six hours. Numerous affidavits and exhibits have been submitted by both sides in support of various motions. While one would not measure the worth of the Mona Lisa by the weight of the paint, it merits notice that the court file in this case is approximately fifteen inches thick, and this does not include most of the documents produced by discovery."

605 F.Supp. at 600.

We need not decide whether discovery was sufficient, as Dreiling failed to alert the district court to this issue in a proper manner. Although the Supreme Court has held that, under Fed.R.Civ.P. 56(f), "summary judgment [should] be refused where the nonmoving party has not had the opportunity to discover information that is essential to his opposition," Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 n. 5, 106 S.Ct. 2505, 2511 n. 5, 91 L.Ed.2d 202 (1986), this protection arises only if the nonmoving party files an affidavit explaining why he or she cannot present facts to oppose the motion. Weir v. Anaconda Co., 773 F.2d 1073, 1082 (10th Cir.1985). "Where a party opposing summary judgment and seeking a continuance pending completion of discovery fails to take advantage of the shelter provided by Rule 56(f) by filing an affidavit, there is no abuse of discretion in granting summary judgment if it is otherwise appropriate." Pasternak v. Lear Petroleum Exploration, Inc., 790 F.2d 828, 832-33 (10th Cir.1986).

Even if we considered Dreiling's Memorandum Brief in Opposition and Dreiling's general statements at hearings about its inability to take depositions of the highest officers of Chrysler and Peugeot as affidavits, ² see Weir, 773 F.2d at 1083; Pasternak, 790 F.2d at 833, they would be insufficient to satisfy the requirements of Rule 56(f) for a continuance to permit additional discovery. The Memorandum Brief argues only that summary judgment is not appropriate because genuine issues of fact remain. Instead of contending that additional discovery is necessary to raise a genuine issue, the brief concludes: "Plaintiff desires to get this case to trial at the earliest possible date and would request that this court immediately set a trial date...." II Supp. R. Tab 27, at 19. The other statements simply express the hope that depositions of the high officers will turn up something useful to Dreiling's case. We have held that "the party filing the affidavit must show how additional time will enable him to rebut movant's allegations of no genuine issue of fact." Patty Precision v. Brown & Sharpe Mfg. Co., 742 F.2d 1260, 1264 (10th Cir.1984). Having failed to make this showing Dreiling cannot claim the protection of Rule 56(f), and we will accordingly "assume that both parties have had ample opportunity for discovery." Liberty Lobby, 477 U.S. at 250 n. 5, 106 S.Ct. at 2511 n. 5.

II Genuine Issues of Fact

We must now address whether "genuine issues" remain with respect to Dreiling's claims. The Supreme Court, in Liberty Lobby, held that a dispute about a material fact is genuine "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." 477 U.S. at 248, 106 S.Ct. at 2510. The trial judge is not to weigh the evidence to determine the truth of the matter, but instead must ask "whether a fair-minded jury could return a verdict for the plaintiff on the evidence presented." Id. at 252, 106 S.Ct. at 2512. In making the decision, the trial judge must consider all the evidence in the light most favorable to the nonmoving party. Redhouse v. Quality Ford Sales, Inc., 511 F.2d 230, 234 (10th Cir.1975). Thus, the trial judge must deny motions for summary judgment when reasonable jurors might disagree, even though the judge as trier of fact would find for the moving party. On appeal, we apply this same standard, Weir, 773 F.2d at 1079, as we review de novo whether genuine issues exist.

A. Breach of Contract

Although Dreiling argues on appeal that it "never admitted the existence of fraudulent warranty claims," Dreiling's Opening Brief at 16, the record is to the contrary. Paragraph 22 of its original Verified Complaint, I Supp. R. Tab 1, at 4, concedes that

"between the dates of March, 1980, and December, 1980, Defendant Lou Bartlett submitted fraudulent warranty claims to Defendant Peugeot Motors of America, Inc., using the forms of Plaintiff, the L.J. Dreiling Motor Company, Inc., and purportedly submitting said fraudulent warranty claims as an authorized representative of Plaintiff the L.J. Dreiling Motor Company, acting within the scope of his employ."

Although subsequent amended complaints excluded this admission, Dreiling's counsel confessed the fraud at an April 17, 1984, hearing. Moreover, counsel admitted that Dreiling "got the money for those fraudulent claims." IV Supp. R. 22.

Section 25 C.1.f. of the Dealer Agreement states that Peugeot may terminate the dealership in the event of "any materially false or fraudulent claim or statement relating to ... warranty repairs...." I Supp. R. Tab 1, Exh. A (emphasis added). In the face of the admitted fraudulent warranty claims, Peugeot's termination of the dealership does not breach the dealer agreement.

Dreiling nevertheless contends that a genuine issue of fact still remains as to whether the wrongdoing of its agent would be imputed to Dreiling. As the district court characterized Dreiling's argument,

"Dreiling argues correctly that [Restatement (Second) of Agency] section 261 presumes an innocent third party and is inapplicable where a third party had actual notice and knowledge of an agent's wrongful conduct. There is a factual dispute as to when Peugeot gained knowledge of Bartlett's fraudulent submissions. Plaintiff alleges that in September 1980 Joseph DiStefano, a Dreiling employee, told William McMullin, the Peugeot central zone service...