Ford Motor Co. v. Lyons, A-C

CourtCourt of Appeals of Wisconsin
Citation137 Wis.2d 397,405 N.W.2d 354
Docket NumberNo. 84-587,A-C,84-587
Parties, 1987-1 Trade Cases P 67,550, 3 UCC Rep.Serv.2d 1998 FORD MOTOR COMPANY, a Delaware corporation, Plaintiff-Respondent and Cross- Appellant, v. Robert L. LYONS, an individual; Kenosha Lincoln-Mercury Ford, Inc., a Wisconsin corporation; Milwaukee Rental Cars, Inc., a Delaware corporation; Green Bay Rental Cars, Inc., a Wisconsin corporation; United Leasing and Financial Services, Inc., a Wisconsin corporation; and United Rent-ar, Inc., a New Jersey corporation, Defendants and Third-Party Plaintiffs- Appellants and Cross-Respondents, United General Leasing Service, Inc., a Wisconsin corporation; Milwaukee Car Lease, Inc., a Wisconsin corporation; United Leasing Services, Inc., a Delaware corporation; and Wausau Car Rentals, Inc., a Wisconsin corporation, Intervening Counter-Claimants and Third-Party Plaintiffs- Appellants and Cross-Respondents, Ford Motor Credit Company, a foreign corporation, Third-Party Defendant- Respondent and Cross-Appellant.
Decision Date04 February 1987

Review Denied.

Randall J. Sandfort, Wausau (argued), for defendants and third-party plaintiffs-appellants and cross-respondents, intervening counter-claimants and third-party plaintiffs-appellants and cross-respondents; Terwilliger, Wakeen, Piehler & Conway, S.C., Wausau, on brief.

David J. Cannon, Milwaukee (argued), for plaintiff-respondent and cross-appellant, third-party defendant-respondent and cross-appellant; John A. Busch, and Charles P. Graupner, of Michael, Best & Friedrich, Milwaukee, on brief.


Robert Lyons and his various corporations engaged in the sale, lease and rental of motor vehicles and related services appeal from certain portions of a judgment of the circuit court based on a jury verdict finding them liable for breaches of contract and fraudulent practices committed during their business dealings with the Ford Motor Company (Ford) and the Ford Motor Credit Company (Ford Credit). 1 Ford and Ford Credit cross-appeal from certain portions of the judgment based on the verdict finding them liable for their misconduct towards Lyons and his corporations. The issues raised in this appeal are too numerous and complex to recite here. Instead, we rely on the section headings to guide the reader through this appellate maze.

We initially conclude that the trial court lost jurisdiction to decide the parties' motions after verdict. Therefore, under sec. 805.16, Stats., all motions after verdict are deemed denied and we review them from this perspective. We affirm the judgment in part, reverse the judgment in part and remand for further proceedings consistent with this opinion.

As a preliminary matter, we note that this case represents one of the longest and most complex jury trials in Wisconsin legal history. The trial began on August 2, 1982 based upon pleadings alleging over 300 causes of action. Several hundred exhibits were received into evidence. The evidentiary phase of the trial lasted over seven months. The jury deliberated more than three weeks on the 103-question special verdict. On appeal, the transcript of the proceedings is over 8000 pages and the parties' briefs and supporting papers number over 1200 pages. 2

Because the appellants are numerous and present a complex network of corporate interrelationships, this opinion will refer to them simply as "Lyons" or the "dealership" since these two entities raise most of the issues on appeal. If the context otherwise requires reference to another appellant, the opinion will do so.

The relationship between Kenosha Lincoln-Mercury Ford (dealership) 3 and Ford and Ford Credit is based in contract. The dealership was a franchisee of Ford and, as such, entered into a Sales and Service Agreement (SSA) with Ford. Ford Credit provided the financing for the dealership under a Floor Plan Financing Agreement (FPFA). Under a power of attorney executed by the dealership in conjunction with the FPFA, Ford Credit would pay Ford for vehicles sent to the dealership. In return, the dealership would pay a monthly interest charge and, after a vehicle was sold, the invoice price to Ford Credit. Ford Credit maintained a security interest in the dealership's vehicles held out for retail sale.

In addition, the dealership contracted with Ford under a Lincoln-Mercury Dealer Daily Rental Contract (LMDDR) and a Ford Rent-A-Car System Agreement (FRAC) which allowed it to rent Ford and Lincoln-Mercury automobiles on a daily basis. The dealership also entered into a Ford Authorized Leasing Systems Agreement (FALS) and a Lincoln-Mercury Dealer Leasing Association Agreement (LMDLA) allowing it to lease Ford and Lincoln-Mercury motor vehicles.

United Leasing and Financial Services, Milwaukee Rental Cars, Green Bay Rental Cars, United Rent-A-Car and Wausau Car Rentals were all Budget Rent-A-Car franchises which held assignments of the dealership's LMDDR. United Leasing and Financial Services also held assignments of the dealership's FRAC and FALS. United General Leasing and United Leasing Services were both leasing entities holding a LMDLA. In addition, United Leasing Services held a FALS and FRAC with Ford. At the times critical to this litigation, Lyons held a controlling interest in all of these corporations.

Following the dealership's and the Budget companies' failure to make the required payments under the LMDDR, Ford canceled this contract with the dealership on May 2, 1980. On May 15, 1980, the dealership responded by terminating the SSA and all other agreements with Ford and Ford Credit. Subsequently, the dealership voluntarily turned over the floor plan vehicles to Ford Credit. Ford Credit, in turn, either sold the vehicles directly to other dealerships or auctioned them off. The dealership also transferred possession of more than 400 Budget vehicles to Ford. Ford, in turn, rented 120 of the vehicles to the Chicago Budget franchise for six months. Ford also sold the vehicles at auction. Ultimately, Ford claimed to have lost $330,000 on the sale of these vehicles.

On May 30, 1980, this action was commenced by Ford as a replevin proceeding to recover the Ford vehicles leased to the dealership and assigned to United Leasing and Financial Services and Milwaukee Rental Cars. Lyons, the dealership, Milwaukee Rental Cars and other corporate defendants counterclaimed against Ford. In addition, certain of Lyons' corporations filed a third party complaint against Ford Credit. The counterclaim included allegations that Ford violated sec. 218.01, Stats., by canceling the dealership's car rental franchise, coercing the dealership's acceptance of unordered vehicles and engaging in unconscionable and unfair acts. The counterclaim and third party complaint included allegations that Ford and Ford Credit acted in bad faith and conspired to put the dealership out of business. Ford then amended its original complaint to include claims that Lyons and certain of his corporations had engaged in tortious conduct and breached contractual duties owed to Ford. Ford Credit also claimed that the dealership had breached the FPFA.

On March 3, 1983, the jury returned a verdict finding that the dealership breached the FPFA with Ford Credit but that Ford Credit sold the repossessed vehicles in a commercially unreasonable manner. In addition, the jury awarded Ford damages for amounts owed by the dealership under the SSA and FRAC. The jury also found that the dealership fraudulently released obligations owed to it by the rental and leasing companies so as to deprive Ford of the money owed to it, that the dealership breached the SSA with Ford, that when Ford terminated the LMDDR it was owed $474,061.93 and that Ford sold the repossessed Budget vehicles in a commercially unreasonable manner.

The jury also found that Ford and Ford Credit had engaged in unconscionable practices in violation of ch. 218, Stats.; coerced the dealership's acceptance of unordered vehicles; acted in bad faith; conspired to injure Lyons, the dealership, United Leasing Services and United Leasing and Financial Services; and breached contracts with Lyons and his corporations in various manners. The jury's findings will be explained in greater detail where necessary to a discussion of specific issues.

On May 2, 1983, the sixtieth day after the jury's verdict, the trial court heard the parties' motions after verdict. On May 26, before the expiration of the statutory time for deciding motions after verdict, the court enlarged the time in which to render a decision to June 8, 1983, pursuant to sec. 801.15(2)(b), Stats. Subsequently, the court enlarged the time for making a decision several more times until a decision was rendered in segments on September 20, September 30, October 24, 1983 and February 21, 1984. The net effect of the jury's verdict and the trial court's rulings on the motions after verdict was a judgment in favor of Ford and against certain of Lyons' corporations in the amount of $416,574.57 and a judgment in favor of Ford Credit and against Lyons personally and certain of his corporations in the amount of $165,623.41.


Initially, we turn to several issues raised at the conclusion of Lyons' brief which we deem waived because they were not raised in the motions after verdict. Specifically, Lyons alleges error in the trial court's ruling that the counterclaim and cross-complaint causes of action for economic duress, fraud, contribution and indemnification were inappropriate. In addition, Lyons appeals the trial court's ruling that only the dealership had standing to sue under the federal Automobile Dealer's Day in Court Act, 15 U.S.C. §§ 1221-25 (1982). Lyons also alleges error in certain of the trial court's procedures, rulings and verdict formation.

Ford and Ford Credit object to Lyons' inclusion of these...

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