Keys Jeep Eagle, Inc. v. Chrysler Corp., 92-10080-CIV.
| Decision Date | 05 July 1995 |
| Docket Number | No. 92-10080-CIV.,92-10080-CIV. |
| Citation | 897 F. Supp. 1437 |
| Parties | KEYS JEEP EAGLE, INC., Florida Keys Jeep Eagle, Inc., Ann Haglund and Darrell Feaker, Plaintiffs, v. CHRYSLER CORPORATION and Chrysler Credit Corporation, Defendants. |
| Court | U.S. District Court — Southern District of Florida |
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William J. Wheeler, Philadelphia, PA, Florida Keys Jeep Eagle, Incorporated, Ann Haglund, Darrell Feaker, for Keys Jeep Eagle, Incorporated.
Eric David Isicoff, Mershon, Sawyer, Johnston, Dunwody & Cole, P.A., Miami, FL, Robert D. Cultice, Goldstein & Manello, P.C., Boston, MA, Eric David Isicoff, Isicoff & Ragatz, P.A., Miami, FL, for Chrysler Corporation.
Eric Christu, Carlton, Fields, Ward, Emmanuel, Smith & Cutler, P.A., West Palm Beach, FL, Rebecca Foye Duke, Winthrop, Stimson, Putman & Roberts, Palm Beach, FL, for Chrysler Credit Corporation.
ORDER GRANTING DEFENDANTS' MOTIONS FOR SUMMARY JUDGMENT
THIS CAUSE comes before this Court upon Defendant Chrysler Corporation and Defendant Chrysler Credit Corporation's Motions for Summary Judgment, both filed on April 4, 1995. Plaintiff filed responses on April 19, 1995. The Court conducted a hearing and heard oral argument on the motions for summary judgment on April 21, 1995.
The instant suit arises out of a debtor-creditor relationship established to facilitate the sale of vehicles by the Plaintiff automobile dealership ("Florida Keys Jeep"). In May 1990, the parties executed a franchise dealership contract with Defendant Chrysler Corp., the franchisor.
The dealer agreement with Defendant Chrysler Corp. provided Florida Keys Jeep with the non-exclusive right to purchase vehicles, parts, accessories and other Chrysler products for resale in a designated sales locality in the Florida Keys.
Florida Keys Jeep also executed financial agreements with Defendant Chrysler Credit Corporation ("CCC") to facilitate Florida Keys Jeep's purchase of vehicles from Defendant Chrysler Corp.1 This financing arrangement is known as a floorplan line of credit. It provides, inter alia, that CCC will extend wholesale financing to Florida Keys Jeep by making loans or advances to Florida Keys Jeep to finance its acquisition of vehicles. The Floorplan Agreement specified that CCC had the option of making any advance and making such an advance was not obligatory and that CCC, at its election, could terminate at any time Florida Keys Jeep's right to request CCC to make an advance.
To secure the payment of Advances under the Floorplan Agreement, Florida Keys Jeep granted to CCC a security interest in and to each vehicle financed by CCC. The Agreement also specified that upon the sale of each vehicle with respect to which CCC had made an advance, Florida Keys Jeep would remit promptly to CCC the total amount then outstanding of CCC's Advance on such vehicle and that Florida Keys Jeep would hold in trust for CCC all proceeds of each vehicle when received by Florida Keys Jeep.
Florida Keys Jeep executed and delivered to CCC a demand promissory note in the principal amount of $840,000 as evidence of Florida Keys Jeep' liability to CCC on account of all Advances. To further secure the payment of all amounts due to CCC, Florida Keys Jeep executed and delivered to CCC an Assignment of Factory Credits wherein it assigned to CCC all credits due and to become due from Chrysler to it and directed Chrysler to make payment directly to CCC of any such credits. The Assignment expressly provides that Florida Keys Jeep grant CCC the right to receive and collect any and all monies due or to become due from Chrysler to Florida Keys Jeep and that Florida Keys Jeep irrevocably appoints CCC as its attorney-in-fact for the purpose of carrying out the terms of the Assignment. CCC sent the Assignment to Chrysler and directed Chrysler to make all payments thereunder directly to Florida Keys Jeep until further notice. A May 18, 1990 Dealer Payment Authorization authorized Chrysler to accept payment from CCC for all vehicles ordered by and sold to Florida Keys Jeep.
In the summer of 1990, Florida Keys Jeep began purchasing vehicles from Chrysler and selling or leasing them retail. Florida Keys Jeep financed the acquisition of vehicles from Chrysler by using Advances made by CCC. In December 1990, Florida Keys Jeep sold vehicles financed by CCC without paying off CCC's lien on the vehicles. Such a sale is a "sale out-of-trust." The parties' Floorplan Agreement provides that CCC's lien on each vehicle that it finances must be paid off at the time such vehicle is sold and that, if Florida Keys Jeep fails to makes such payments when due, Florida Keys Jeep is in default.
On or about December 18, 1990, CCC notified Chrysler that it would no longer pay for vehicles ordered by Florida Keys Jeep without CCC's prior approval as to each vehicle. This action is referred to as "finance hold." From and after CCC placed Florida Keys Jeep on finance hold, Florida Keys Jeep continued to purchase vehicles from Chrysler with CCC financing, but CCC approved each purchase in advance. During this time, Chrysler assisted Florida Keys Jeep in obtaining vehicles.
In a January 31, 1992 letter, CCC advised Florida Keys Jeep that, based on a review of Florida Keys Jeep's books and records, a minimum investment of $136,000 in Florida Keys Jeep by March 2, 1992 was necessary if CCC was to continue as Florida Keys Jeep's financing source. Florida Keys Jeep agreed that additional working capital was needed, but disagreed as to the amount.
Plaintiff Ann Haglund, who was the franchise owner at this time, wrote to CCC on February 12, 1992 and accused four CCC employees of improper conduct. Haglund did not accuse Chrysler Corp. CCC notified Florida Keys jeep in a March 3, 1992 letter that based on Florida Keys' failure to respond to CCC's January 31, 1992 letter requesting additional investment and on Haglund's confirmation that she would not make any additional investment, CCC intended to cancel Florida Keys Jeep's wholesale credit lines as of March 4, 1992.
Florida Keys Jeep notified Chrysler and CCC in a March 5, 1992 letter that as of April 1, 1992, Florida Keys jeep would cease doing business. Florida Keys Jeep advised Defendants that CCC's "numerous breaches" forced Florida Keys Jeep to close its dealership. Florida Keys Jeep made no accusations against Chrysler Corp.
Plaintiffs have filed suit alleging fraud, breach of fiduciary responsibility, violation of 15 U.S.C. §§ 1221-1225 and breach of contract. The allegations against CCC refer to a series of alleged bad acts by CCC in its handling of the floorplan credit line. The Amended Complaint further alleges that CCC's actions were undertaken at the direction of Chrysler Corporation to further Chrysler Corporation's goal of reducing the number of Jeep dealers in the United States. Plaintiffs seek $20,000,000.00 in actual damages, an unspecified amount in punitive damages, as well as attorneys' fees and costs.
Summary judgment is appropriate only where it is shown that no genuine dispute as to any material fact exists and that the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56; Matsushita Elec. Industrial Co. v. Zenith Radio Corp., 475 U.S. 574, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). In ruling on the moving party's motion, the court must view the evidence in the light most favorable to the non-moving party. Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). In so doing, the court "should `resolve all reasonable doubts about the facts in favor of the non-movant' and draw `all justifiable inferences ... in his favor.'" United States v. Four Parcels of Real Property, 941 F.2d 1428, 1437 (11th Cir.1991) (alteration in original) (citation omitted).
Initially, the moving party bears the burden of pointing to that part of the record which shows the absence of a genuine issue of material fact. If the movant meets its burden, the burden then shifts to the nonmoving party to establish that a genuine dispute of material fact exists. Hairston v. Gainesville Sun Pub. Co., 9 F.3d 913 (11th Cir.1993), reh'g denied, 16 F.3d 1233 (11th Cir.1994). To meet this burden, the nonmoving party must go beyond the pleadings and "come forward with significant, probative evidence demonstrating the existence of a triable issue of fact." Chanel, Inc. v. Italian Activewear, Inc., 931 F.2d 1472, 1477 (11th Cir.1991). If the evidence relied on is such that a reasonable jury could return a verdict in favor of the non-moving party, then the Court should refuse to grant summary judgment. Hairston, 9 F.3d at 913. However, a mere scintilla of evidence in support of the non-moving party's position is insufficient to defeat a motion for summary judgment. Anderson v. Liberty Lobby, 477 U.S. 242, 252, 106 S.Ct. 2505, 2512, 91 L.Ed.2d 202 (1986).
Defendants move for summary judgment on Plaintiffs' four claims2 for 1) fraud; 2) breach of fiduciary duty; 3) violation of 15 U.S.C. §§ 1221-1225; and 4) breach of contract.
Plaintiffs seek to hold Defendant Chrysler Corporation liable for CCC's alleged wrongdoings on grounds that "Chrysler has made a policy decision to reduce the number of Jeep Eagle franchised dealers in the United States by encouraging its subsidiary, CCC, to force closure of said businesses." Am. Compl. ¶¶ 65-66. Plaintiffs seem to base their claims against Chrysler Corp. on the alter ego theory and agency principles.
Under Florida law, to pierce the corporate veil, a plaintiff must show that 1) one corporation is a "mere instrumentality" of the other;3 and that 2) a corporation is "a device or sham to mislead creditors or exists for a fraudulent purposes." Dania Jai-Alai Palace v. Sykes, 450 So.2d 1114, 1117-20 (Fla.1984).
Plaintiffs have not offered any evidence in support of their alter ego ...
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