Fiat Distributors, Inc. v. Hidbrader

• Decision Date: 31 October 1978
• Docket Number: No. 1-178A18,1-178A18
• Citation: 178 Ind.App. 200,381 N.E.2d 1069
• Parties: FIAT DISTRIBUTORS, INC., Plaintiff-Appellant, v. James HIDBRADER d/b/a Hidbrader Motor Sales, Defendant-Appellee.
• Court: Indiana Appellate Court

Page 1069

381 N.E.2d 1069

178 Ind.App. 200

FIAT DISTRIBUTORS, INC., Plaintiff-Appellant, v. James HIDBRADER d/b/a Hidbrader Motor Sales, Defendant-Appellee.

No. 1-178A18.

Court of Appeals of Indiana, First District.

Oct. 31, 1978.

Don M. Robertson, Thomas Bunger, Bunger, Harrell & Robertson, Bloomington, for plaintiff-appellant.

Thomas A. Berry, Bloomington, for defendant-appellee.

LOWDERMILK, Judge.

STATEMENT OF THE CASE

Plaintiff-appellant Fiat Distributors, Inc. (F.D.I.) appeals from a judgment of the trial court, wherein F.D.I. was granted judgment against defendant-appellee James Hidbrader (Hidbrader) in the amount of $21,075 based on an over payment to Hidbrader, but wherein the trial court also granted judgment in the amount of $12,567.05 to Hidbrader on his counterclaim, which counterclaim was based on F.D.I.'s breach of its contract to buy back certain new and unused Fiat automobiles.

FACTS

On February 26, 1976 Hidbrader, who operated an automobile retail business in Bloomington, Indiana, gave F.D.I. notice that he was going out of business and that he wanted to terminate his franchise for selling Fiat automobiles. On March 5, 1976 F.D.I. acknowledged Hidbrader's termination and offered to repurchase his current parts inventory and his Fiat sign.

Concerning the repurchase of Fiat automobiles the franchise agreement, which was originally signed between F.D.I. and Hidbrader, contained the following:

"Repurchase Option If this Agreement terminates for any reason whatsoever, FDI shall have the option, to be exercised by written notice given within thirty (30) days after the effective date of termination, to repurchase and reacquire from Dealer any or all Fiat and FDI Products in Dealer's stock, as FDI shall in its sole discretion select subsequent to the date of such notice, and unsold by Dealer to a bona fide purchaser on the day when Dealer shall have received such written notice, including Fiat and FDI Products sold to or in the possession of any person, firm or corporation directly or indirectly owned or controlled by Dealer or affiliated with Dealer by reason of direct or indirect common ownership or control. The price for any Fiat passenger car shall be the Dealer Price at which such vehicle was purchased from FDI (excluding FDI's charge or charges for distribution and delivery) plus taxes paid by Dealer at the time of such purchase and less all prior refunds, credits, rebates, allowances, or discounts made by FDI with respect to such vehicle. If any Fiat passenger car is used or damaged or is not in first class salable condition or is of a type and model not being offered for sale by FDI on such date as a current type and model, then the price for such vehicle shall be a reasonable amount less than that prescribed above, to be mutually determined."

In order to induce the Bloomfield State Bank to finance Hidbrader's inventory of cars, F.D.I. made the following agreement with the Bloomfield State Bank:

"We (F.D.I.) will repurchase in case of termination of this franchise by either party, not more than thirty (30), new and unused current model Fiats. . . ." (Our insert)

After hearing of Hidbrader's intentions of discontinuing his Fiat franchise, D. E. Manning, the President of F.D.I. and an acquaintance of Hidbrader, called Hidbrader and informed him that F.D.I. would buy back up to 30 of the new and unused Fiat cars that Hidbrader possessed. No inference was given that such cars had to be current 1976 models.

Rather than repurchase all of Hidbrader's new and unused Fiat automobiles, of which there were four 1976 models and fourteen 1975 models, F.D.I. helped Hidbrader sell his inventory of new and unused Fiats to other Fiat dealers. Because of F.D.I.'s failure to repurchase the automobiles outright, Hidbrader lost an average of $250 per car, had to expend more than 150 hours in order to complete the selling of those cars, and had to keep his showroom open five months longer than he otherwise would have done.

In July 1976 F.D.I. issued Hidbrader a settlement check for $22,030.70. By mistake another check in the same amount was sent to Hidbrader. When F.D.I. requested Hidbrader to return the check, he refused, stating that he was damaged by F.D.I.'s failure to buy back all his new and unused automobiles, to buy back all of his parts inventory, and to reimburse him for certain interest, time, and travel expenses for which he claimed that F.D.I. owed him.

F.D.I. brought this action, seeking the return of its $22,030.07 over payment. Hidbrader counterclaimed for the same amount; such counterclaim was based upon F.D.I.'s alleged breach of contract. The trial court granted judgment in favor of F.D.I. on its original action in the amount of $21,075, but also granted Hidbrader judgment on his counterclaim in the amount of $12,567.05, such sum to be a setoff against F.D.I.'s judgment.

ISSUES

The issues which have been presented to this court for review are as follows:

1. Whether Hidbrader was a third party beneficiary of the buy back agreement between F.D.I. and Bloomfield State Bank.

2. Whether the judgment was contrary to law.

3. Whether the judgment was supported by sufficient evidence.

DISCUSSION AND DECISION

Issue One

F.D.I. contends that the repurchasing agreement between F.D.I. and the Bloomfield State Bank in no way affected F.D.I.'s franchising contract with Hidbrader. We disagree.

The clear intent of the repurchasing agreement between F.D.I. and the Bloomfield State Bank was to provide financing for Hidbrader's inventory of Fiat automobiles. Such a contract obviously was intended to benefit all three business entities.

A third party beneficiary contract is one in which the promisor has a legal interest in performance in favor of the third party and...