Hein v. Chrysler Corp.
| Decision Date | 26 November 1954 |
| Docket Number | No. 32945,32945 |
| Citation | 277 P.2d 708,45 Wn.2d 586 |
| Court | Washington Supreme Court |
| Parties | Kenneth G. HEIN, Appellant, v. CHRYSLER CORPORATION, a Delaware corporation; DeSoto Motor Corporation, a Delaware corporation; and E. E. Harrison and Lepha Harrison, his wife, Respondents. |
Peyser, Cartano, Botzer & Chapman, Robert A. O'Neill, Seattle, for appellant.
Bogle, Bogle & Gates, Orlo B. Kellogg, Seattle, for respondents.
Plaintiff, a former retail dealer in automobiles manufactured by defendant Chrysler Corporation, brought this action to recover in tort for the allegedly malicious interference by defendants with plaintiff's business.
Prior to the trial of this action, plaintiff had obtained a judgment in the Federal court at Seattle in the amount of $31,675.43 against defendant Chrysler Corporation in an action denominated by plaintiff as a 'breach of contract' suit. In that suit Chrysler Corporation was the sole defendant.
In the present action there were named as defendants Chrysler Corporation, DeSoto Motor Corporation (the agent of Chrysler in marketing automobiles through dealers), and E. E. Harrison (northwest regional manager of DeSoto Motor Corporation) and his wife.
Plaintiff's complaint alleged facts which he contended amounted to malicious interference with his business by defendants and prayed for damages of $67,000. Every item of damage which plaintiff sought to recover was based upon the premise that defendant Chrysler Corporation was obligated by contract to deliver to plaintiff forty-five more motor vehicles than Chrysler did deliver to him during the fourteen-month period ending February 28, 1951.
During the trial of the case before a jury, plaintiff voluntarily moved to dismiss the suit as to Harrison and wife and they were accordingly dismissed as defendants. At the conclusion of the plaintiff's case the two remaining defendants challenged the sufficiency of the evidence to sustain a verdict against either of them and moved to dismiss the action. The motion was granted and a judgment of dismissal was entered.
On this appeal plaintiff makes three assignments of error which jointly raise the single issue of whether there was sufficient evidence at the close of plaintiff's case to take the case to the jury.
Since this is an appeal from a judgment of dismissal entered upon sustaining a challenge to the sufficiency of the plaintiff's evidence in a jury case, we must, for the purpose of this appeal, accept all of appellant's evidence as true and give him the most favorable inferences which can be drawn therefrom. Gray v. Department of Labor and Industries, 43 Wash.2d 578, 262 P.2d 533.
The material facts, so treated, may be summarized thus:
Respondent Chrysler Corporation, hereafter called Chrysler, is the manufacturer of DeSoto and Plymouth cars. Respondent DeSoto Motor Corporation, hereafter referred to as DeSoto, is a subsidiary of Chrysler engaged in sales promotion and, in an advisory capacity, in the distribution of DeSoto and Plymouth cars. Chrysler distributes its new cars throughout the United States through certain designated retail dealers (called direct dealers), each of whom has a specified territory assigned to him, either on an exclusive or non-exclusive basis.
In January, 1945, appellant entered into a written contract with Chrysler under which appellant became a direct dealer of Chrysler, as an independent contractor and not as an agent. The terms of the contract between appellant and Chrysler were embodied in two documents, one entitled Agreement Between DeSoto Direct Dealer and Chrysler Corporation DeSoto Division, and the other, Chrysler Corporation DeSoto Direct Dealer Terms of Purchase. Both agreements were executed upon forms prepared by Chrysler. At the times material to this controversy appellant had the exclusive right to sell DeSoto cars in Whatcom county, and a non-exclusive right to sell Plymouth cars therein.
The parties have debated at length in their briefs the issue of whether the contract between appellant and Chrysler was a binding one and especially whether it bound Chrysler to deliver any determinable number of automobiles to appellant. We will not consider that issue on this appeal because we agree with appellant that the result must be the same here whether the contract is a binding one or not, inasmuch as this case is framed to sound in tort and not in contract. For the purpose of this appeal we will assume, without deciding, that Chrysler was obligated to deliver to appellant forty-five more motor vehicles than he received during the fourteen-month period here involved.
When the contract was executed in January, 1945, Chrysler was manufacturing no cars because World War II was in progress. In reliance on the contract, appellant leased a building in Bellingham and equipped it to carry on the business of selling and servicing new and used cars in Whatcom county. When the war ended, Chrysler began to manufacture cars and to ship them to its dealers, including appellant. From 1946 through 1949 there was no difficulty between appellant and either Chrysler or DeSoto. Appellant (and all other direct dealers) could easily sell all new cars he could get from Chrysler because the pent-up demand for new cars created an unprecedented 'seller's market.'
To try to satisfy all of its dealers, all of whom wanted more cars, Chrysler put into effect a quota system of allocating cars to its dealers under which each dealer was supposed to get his 'fair share' of the new cars manufactured by Chrysler. Under this system appellant received approximately nine-tenths of one percent of the cars allocated by Chrysler to the northwest region during the years from 1946 through 1949. In 1950, and during the first two months of 1951, the number of cars delivered to appellant by Chrysler was cut approximately forty percent. Appellant testified he was never informed by respondents and never learned (until after he sold his business) what percentage of cars shipped to the northwest region was allocated to him.
Appellant called as a witness Kenneth B. Watts, who had been a district manager for Chrysler from 1946 through 1952, at which time he was discharged by E. E. Harrison, the northwest regional manager of DeSoto, hereafter called Harrison. Watts testified that he worked directly under Harrison and had charge of the district in which appellant's dealership was located. Watts said that in 1950 Harrison decided to get rid of appellant as a direct dealer and to take over his business by placing Harrison's son-in-law in charge of the Bellingham dealership after forcing appellant to quit or sell out. Appellant was at all times one of the ten best dealers handling Plymouth and DeSoto cars in the northwest region, and Harrison had no just reason to try to get rid of him, according to Watts' testimony.
In pursuance of his plane to force appellant to sell out his business, Harrison told Watts to 'build up a case' against appellant by sending in to Chrysler false and misleading reports which were derogatory concerning appellant's operation of his dealership. Pursuant to these instructions Watts sent in a series of reports to Chrysler indicating that appellant was neglecting his business, was 'hoarding' new cars and refusing to sell them to prospective customers and was thinking of selling out his dealership.
Watts also testified that he was instructed by Harrison to force appellant (and apparently all other dealers for Chrysler) to buy whatever sales aids Chrysler wished to sell its dealers by warning appellant that he would not get a fair share of new cars to sell unless he allowed Chrysler to dictate how his business should be run. As examples of such conduct, Watts testified that he used such compulsion to force appellant to buy service mailing cards, an Ad-matic projector, a neon picture, an animated motor stand, special tools, special advertising and expensive models of cars, all of which appellant did not want but was forced to buy to make sure that he would get his share of desirable new cars to sell. In addition, Watts said that he forced appellant to hire two additional salesman whom he did not need.
On cross-examination both Watts and appellant conceded that appellant had always purchased without serious protest whatever sales aids Watts had advised him to buy, and that appellant and Watts had always parted as friends after such sales.
Watts testified that Harrison's plot to have his son-in-law take over appellant's dealership failed when Chrysler issued orders to all of their employees (apparently late in 1950) that no employee would be allowed to purchase or take over the business of a dealer in case of a forced liquidation. Thereafter two men not connected in any way with Harrison formed a partnership and purchased appellant's business for approximately $32,000. The purchase agreement recited that the good will of the business was valued in the sale at one dollar.
Appellant, in support of his claim for damages suffered as a result of the alleged tortious conduct of respondents Chrysler and DeSoto, presented testimony showing that if he had received the forty-five additional new cars he claimed were due him as his fair share of the cars manufactured by Chrysler, he would have made an additional profit (before selling his dealership) as follows:
$18,563.98 .... Sale of new cars
2,364.07 .... Sale of used cars turned in on
new cars
4,011.30 .... Extra income servicing cars
2,693.25 .... Extra insurance and interest
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$27,632.60 .... Total loss of profits
In addition, appellant presented testimony that the good will value of his business, before respondents forced him to sell by cutting off his fair share of the supply of cars coming into the region, was $40,000.
Appellant testified that he decided to sell his business in October, 1950, when he learned that three cars which...
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