Green Bay Auto Distributors v. Willys-Overland Motors

• Decision Date: 28 December 1951
• Docket Number: Civ. No. 6512.
• Citation: 102 F. Supp. 151
• Parties: GREEN BAY AUTO DISTRIBUTORS, Inc. v. WILLYS-OVERLAND MOTORS, Inc.
• Court: U.S. District Court — Northern District of Ohio

102 F. Supp. 151

GREEN BAY AUTO DISTRIBUTORS, Inc. v. WILLYS-OVERLAND MOTORS, Inc.

Civ. No. 6512.

United States District Court N. D. Ohio, W. D.

December 28, 1951.

Smith & Ells, Toledo, Ohio, for plaintiff.

Milton C. Boesel, Toledo, Ohio, for defendant.

KLOEB, District Judge.

This matter is before the Court on motion of defendant for summary judgment, directed to the first and second causes of action of the second amended complaint, on the ground that the said complaint fails to show that there is a genuine issue as to any material fact and that the defendant is therefore entitled to judgment as a matter of law.

The motion is governed by the provisions of Rule 56, Fed.Rules Civ.Proc., 28 U.S. C.A., which provides:

"(b) A party against whom a claim, * * * is asserted * * * may, at any time, move with or without supporting affidavits for a summary judgment in his favor as to all or any part thereof.

"(c) * * * The judgment sought shall be rendered forthwith if the pleadings, depositions, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. * * *" (Emphasis added.)

This rule was construed in Toebelman v. Missouri-Kansas Pipe Line Co., 3 Cir., 1942, 130 F.2d 1016, at page 1018 and the Court there said: "It is now well settled that summary judgment may be entered for either party if the pleadings, depositions, admissions on file and affidavits show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. Civil Procedure Rule 56. Stated conversely, a substantial dispute as to a material fact forecloses summary judgment. McElwain v. Wickwire Spencer Steel Co., 2 Cir., 1942, 126 F.2d 210; Miller v. Miller, 1941, 74 App.D.C. 216, 122 F.2d 209; Whitaker v. Coleman, 5 Cir., 1940, 115 F.2d 305. Upon a motion for a summary judgment it is no part of the court's function to decide issues of fact but solely to determine whether there is an issue of fact to be tried. Ramsouer v. Midland Valley R. Co., D.C. Ark., 1942, 44 F.Supp. 523. All doubts as to the existence of a genuine issue as to a material fact must be resolved against the party moving for a summary judgment. Weisser v. Mursam Shoe Corporation, 2 Cir., 1942, 127 F.2d 344 145 A.L.R. 467."

In the case of Sartor v. Arkansas Natural Gas Corp., 321 U.S. 620, at page 627, 64 S.Ct. 724, at page 728, 88 L.Ed. 967, the Court said on this subject: "The Court of Appeals below heretofore has correctly noted that Rule 56 authorizes summary judgment only where the moving party is entitled to judgment as a matter of law, where it is quite clear what the truth is, that no genuine issue remains for trial, and that the purpose of the rule is not to cut litigants off from their right of trial by jury if they really have issues to try. American Insurance Co. v. Gentile Brothers Co., 5 Cir. 109 F.2d 732; Whitaker v. Coleman, 5 Cir. 115 F.2d 305. * * *"

It appears from the allegations of the second amended complaint that, on August 31, 1945, the plaintiff entered into an exclusive "Distributor Sales Agreement" with the defendant, which was intended to cover the distribution by plaintiff of motor vehicles, parts, accessories and equipment manufactured by the defendant, in twenty-four counties in Wisconsin and fifteen counties in Northern Michigan, a copy of which contract is attached to the second amended complaint as Exhibit A.

It is alleged that the plaintiff met the conditions preliminary to the execution of the contract imposed upon it by the defendant, including acquiring a building in Green Bay, Wisconsin, for the purpose of housing sales and display facilities, a parts and accessory department and a service garage, in conformity to plans and specifications of the defendant, and, in doing so, the plaintiff expended large sums of money.

The first cause of action alleges that, as an inducement to plaintiff to enter into the said distributor sales agreement, the defendant, through George Harold Bell, its Director of Sales, and other executives, employees and agents, made the following representations to plaintiff:

1. That it "had developed a two-door five-passenger sedan on short wheel base, with economical fuel consumption, superior riding qualities and advanced styling for introduction into the large post-war low-priced motor vehicle market;";

2. That "said passenger sedan was engineered, tested, approved and ready for production,";

3. That "said sedan was designed to be delivered in the One Thousand Dollar ($1,000.00) to One Thousand Two Hundred Dollar ($1,200.00) price class;";

4. That "high volume production of said post-war two-door five-passenger sedan would begin as soon after the cessation of World War II as tooling could be completed and materials were available.";

5. That defendant "would build up its production to three hundred thousand (300,000) motor vehicles per year within three years, most of which would be two-door five-passenger sedans;".

The plaintiff further alleged that the said passenger automobile "was not placed in production as represented". It also alleged that the said representations "were false and were made for the fraudulent purpose and intention of inducing plaintiff to enter into and to continue in said exclusive distributor sales agreement;"; that defendant "at no time intended to produce a conventional five-passenger vehicle as represented;"; that plaintiff "was misled and fraudulently deceived by the aforesaid misrepresentations inducing plaintiff to enter into said exclusive distributor sales agreement"; that plaintiff "relied and acted upon all of said false and fraudulent representations and promises to manufacture and deliver to plaintiff said two-door five-passenger sedan"; and that plaintiff suffered damages in loss of business and profits thereby in the sum of $200,000.

For a second cause of action plaintiff alleged that it duly performed all of the terms and conditions of said distributor sales agreement on its part to be performed, and utilized its entire facilities, personnel, capital and credit, in distributing the defendant's Jeeps and Jeep-type motor vehicles in large numbers at retail and at wholesale, and that the defendant "arbitrarily, wrongfully, without just cause and in bad faith" cancelled plaintiff's exclusive distributor sales agreement, causing injury and damage to plaintiff in loss of business, capital investment and profits in the sum of $100,000.

The contract contains the following pertinent provisions with reference to rights of cancellation, the superseding of all prior negotiations, representations and understandings, and its construction according to the laws of the State of Ohio, which govern the rights of the parties thereto: "21. Duration, Termination and Cancellation — This Agreement supersedes any and all sales agreements between the parties hereto and shall continue in force and govern all relations and transactions between the parties hereto until cancelled or terminated. It is agreed that either party shall have the right to cancel and terminate this agreement at any time upon thirty (30) days written notice to the other party, given by Registered Mail or personal delivery thereof, and such cancellation shall operate as a cancellation, as of the date of such notice, of all unfilled orders and requisitions. * * *"

The sales agreement in question, in paragraph 24 thereof, has a provision which is important as bearing upon the right of action, if any, of the plaintiff against the defendant based upon representations or understandings made prior to the date of the agreement, reading as follows: "24. Prior Memoranda Superseded Hereby — There are no verbal agreements, representations or understandings affecting this agreement or any supplement thereto or the subject matter thereof, and all negotiations, representations and understandings are merged herein, and this agreement supersedes, cancels and annuls all contracts, understandings and agreements of prior date between the parties hereto and shall continue in force and govern all transactions between the parties hereto until the expiration hereof or the cancellation or termination hereof by either party, and Distributor hereby releases and forever discharges Manufacturer, from any claims, demands, or causes of action which it may have against it arising out of or by reason of any matter or thing occurring prior to the date hereof, except as to credits heretofore approved and allowed in writing by Manufacturer arising under any preceding agreement in effect at the time of execution of this agreement. * * *"

The agreement contains the following clause as to under the laws of what State the contract should be construed:

"27. * * * It and all of its terms shall be governed by and construed according to the laws of the State of Ohio; * * *."

There have been filed on behalf of plaintiff on this motion the affidavits of Albert Ginsberg, president and principal shareholder of plaintiff, and George Harold Bell, who was sales manager for defendant prior to and at the time the agreement sued upon was entered into.

The affidavit of Mr. Ginsberg states, in substance, that, during the latter part of the year 1944, he took up negotiations with the defendant with the aim of securing a distributorship for its motor vehicles for Northern Wisconsin and received a letter from Mr. Bell, defendant's General Sales Manager; that, in the course of the negotiations, on or about August 9, 1945, Mr. Bell represented to him that Willys-Overland as its first postwar products was coming out with a civilian Jeep, an all steel body Jeep station wagon and a line of Jeep trucks; that Mr. Bell stated, with reference to a conventional passenger car "that the company was definitely coming out with a small conventional passenger sedan; that the company had...