Moecker v. Honeywell Intern., Inc.

• Decision Date: 04 April 2001
• Docket Number: No. 5:97CV329OC10GRJ.,5:97CV329OC10GRJ.
• Citation: 144 F.Supp.2d 1291
• Parties: Michael E. MOECKER, as Assignee for the Benefit of Creditors for Vehicle Safety Systems, Inc., Plaintiff, v. HONEYWELL INTERNATIONAL, INC. f/k/a AlliedSignal Inc., a New Jersey Corporation authorized to do business in the State of Florida, et al., Defendants.
• Court: U.S. District Court — Middle District of Florida

144 F.Supp.2d 1291

Michael E. MOECKER, as Assignee for the Benefit of Creditors for Vehicle Safety Systems, Inc., Plaintiff, v. HONEYWELL INTERNATIONAL, INC. f/k/a AlliedSignal Inc., a New Jersey Corporation authorized to do business in the State of Florida, et al., Defendants.

No. 5:97CV329OC10GRJ.

United States District Court, M.D. Florida, Ocala Division.

April 4, 2001.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

R. Hewitt Pate, John S. Martin, Hunton & Williams, Richmond, VA, Marty Leonard Steinberg, Barry R. Davidson, D. Bruce Hoffman, Hunton & Williams, Miami, FL, for Honeywell, International, Inc., f/k/a AlliedSignal, Inc., defendant.

Ladd H. Fassett, Fassett, Anthony & Taylor, P.A., Orlando, FL, for David Arnold, Michael E. Moecker, as Assignee for the Benefit of Creditors for Vehicle Safety Systems, Inc., plaintiffs.

ORDER

HODGES, District Judge.

This case comes before the Court for consideration of five reports and recommendations issued by the United States Magistrate Judge (Docs.176, 190, 192, 200, 217). Each report and recommendation is ripe for consideration, as the parties have either filed objections or the time for objecting has elapsed.

Accordingly, upon an independent determination, it is ordered that:

(1) the report and recommendation of the Magistrate Judge entered on September 20, 2000 (Doc. 176) is adopted, confirmed and made a part hereof, and Defendant Honeywell's Motion to Dismiss Counts II, III, V, & VI of the Second Amended Complaint (Doc. 40) is DENIED;¹

(2) the report and recommendation of the Magistrate Judge entered on January 17, 2001 (Doc. 190) is adopted, confirmed and made a part hereof, the objections filed by Plaintiff Moecker (Doc. 194) and Defendant Honeywell (Doc. 196) are OVERRULED, and

(a) Defendant Honeywell's Motion for Summary Judgment (Doc. 62) is DENIED;

(b) Defendant Honeywell's Motion for Summary Judgment (Doc. 62) as to the claims for monopolization and attempted monopolization under § 2 of the Sherman Act, asserted in Count III is GRANTED;

(c) Defendant Honeywell's Motion for Summary Judgment (Doc. 62) as to the claims for monopolization and attempted monopolization under Florida law asserted in Count VI is GRANTED; and

(d) Defendant Honeywell's Motion for Summary Judgment (Doc. 62) as to the claims for conspiracy to monopolize asserted in Count III under § 2 of the Sherman Act and asserted in Count VI under the Florida law is DENIED; and

(3) the report and recommendation of the Magistrate Judge entered on January 30, 2001 (Doc. 192) is adopted, confirmed and made a part hereof, the objections filed by Defendant Honeywell (Doc. 202) are OVERRULED, and the Plaintiff's Motion in Limine as to Arnold's Conviction (Doc. 104) is GRANTED. The Defendant shall be prohibited from referring, either directly or indirectly, to Arnold's 1983 conviction of distribution and possession with intent to distribute cocaine hydrochloride;

(4) the report and recommendation of the Magistrate Judge entered on February 12, 2001 (Doc. 200) is adopted, confirmed and made a part hereof, the objections filed by the Plaintiff (Doc. 211) are OVERRULED, and the Plaintiff's Motion for Partial Summary Judgment Determining Liability Under Robinson-Patman Act (Doc. 72) is DENIED;

(5) the report and recommendation of the Magistrate Judge entered on March 8, 2001 (Doc. 217) is adopted, confirmed and made a part hereof, the objections filed by the Defendant (Doc. 221) are OVERRULED, and Honeywell's Motion in Limine to exclude the testimony of Dr. Henry Fishkind (Doc. 67) is DENIED.

IT IS SO ORDERED.

REPORT AND RECOMMENDATION¹

JONES, United States Magistrate Judge.

Pending before the Court are Honeywell's Dispositive Motion for Summary Judgment (Doc. 62) and Memorandum In Support of Honeywell's Dispositive Motion For Summary Judgment. (Doc. 99.) Honeywell has also filed three appendices in support of its request for summary judgment. (Docs. 63, 64, & 65.) Plaintiff, Vehicle Safety Systems, Inc. ("VSSI") and counterdefendant, David Arnold ("Arnold") have filed a joint Memorandum Of Law In Opposition To Defendant's Motion For Summary Judgment (Doc. 137) and an appendix. (Doc. 138.) The Court heard oral argument on the pending motion on September 6, 2000 in conjunction with a Daubert hearing regarding the expert testimony of Plaintiff's expert, Dr. Henry Fishkind. During the hearing additional issues were raised and, accordingly, the Court requested that the parties provide supplemental briefs on the issue of the effect, if any, of the definition of the relevant market offered by Dr. Fishkind at the hearing. Honeywell filed its supplemental memorandum (Doc. 178) to which VSSI responded. (Doc. 179.) Honeywell thereafter requested permission to file a reply, and on November 1, 2000 Honeywell filed its reply memorandum (Doc. 183) after receiving permission form the Court. With permission from the Court VSSI filed a brief reply to Honeywell's reply. (Doc. 188.) The matter is now ripe for disposition.

Upon due consideration and for the reasons discussed below, the Court concludes that Honeywell's Motion For Summary Judgment is due to be GRANTED in part and is due to be DENIED in part.

I. BACKGROUND FACTS

The pleadings, memoranda, affidavits, and other evidence in the record, construed in the manner most favorable to the Plaintiff, disclose the following details.

VSSI is a former Honeywell customer that sold seat belts and related components ("safety restraints") to companies that converted vans for custom uses. The plaintiff is Michael Moecker, who represents the interests of the creditors of VSSI, pursuant to an assignment for the benefit of creditors proceeding filed in the Fifth Judicial Circuit Court for Marion County, Florida. VSSI has brought claims for violation of an alleged exclusive distributorship contract, as well as antitrust claims under the Robinson Patman Act, 15 U.S.C. § 13(a) and the Sherman Act sections one and two, 15 U.S.C. §§ 1 and 2 and related state antitrust claims.

This suit involves AlliedSignal's Safety Restraint Division,² which manufactured seat belts for use by the van conversion industry. Van conversion companies buy shell vans from major automobile manufacturers and convert them into conversion vans. The seat belts sold by AlliedSignal for use in custom vans are modifications of the seat belts sold by AlliedSignal to the major automobile manufacturers. Safety restraint manufacturers sell primarily to original equipment manufacturers like Ford or General Motors. Only a small portion of their sales are to companies that make conversion vans.³

In 1991 Honeywell was selling to one distributor to the van conversion industry, Lavanture Products Corporation ("Lavanture"). During this time frame AlliedSignal sold seat belts to manufacturers of about fifty percent of the custom vans manufactured in the United States. (Doc. 76, Ford Dep. at 21.) In late 1991 Honeywell also began selling seat belts for the van conversion industry through a second distributor, VSSI. The relationship took on a new dimension in June, 1992 when a "representation agreement" was signed between VSSI and a corporation called Northeast Products. (Doc. 97, Tab A.) Northeast Products was a company formed by William Rumancik, the husband of Julie Rumancik, who was the Honeywell account manager for VSSI's account. Pursuant to the terms of the Representation Agreement, VSSI agreed to pay Northeast Products a designated portion of its profits. (Doc. 97, Tab A.) Between August 1992 and May 1996 VSSI paid Northeast Products $204,966.34, which funds were distributed to Robert Zimmerman, the Honeywell sales manager and Julie Rumancik, the Honeywell account manager. (Doc. 63, Ex. 18.) While the parties vigorously dispute whether the payments were bribes paid to induce Honeywell to continue to do business with VSSI and grant VSSI favorable treatment, or whether the payments were extorted from VSSI in order for VSSI to continue to do business with Honeywell, there does not appear to be a serious dispute that Northeast Products did not provide any customers to VSSI and otherwise did nothing to earn the funds paid to it by VSSI.

Notwithstanding how the payments to Northeast Products are characterized, after the execution of the Representation Agreement, VSSI's credit terms were favorably increased from $60,000 to $200,000 and its payment terms were extended from 30 days to 60 days. (Doc. 63, Ex. 108.) Additionally, Honeywell ignored the credit limit and permitted VSSI to increase its receivable balance to $3.8 million by September 1993.

By the fall of 1993 Honeywell's seat belts were sold to ninety-two percent of the van conversion market. Of these sales VSSI sold Honeywell's seat belts to sixty-seven percent of the market while LaVanture's share had dropped from fifty percent to twenty-five percent of the van conversion market. (Doc. 63, Ex. 7 at 3.)

By the fall of 1993 the large receivable of VSSI had been brought to the attention of Honeywell management. The parties' characterization of the events that ensued thereafter is starkly in contrast.

Honeywell claims that it "struggled for years to help VSSI remain in business and pay down the large receivable that had been built up." (Doc. 99, at 20.) In contrast, VSSI argues that Honeywell made a "secret decision to downsize VSSI in such a manner so its customers would be transferred to Lavanture" (Doc. 137, at 8) and it could recoup as much of the receivable as possible before VSSI went out of business. Whatever the explanation, in 1994 VSSI lost business to Lavanture because VSSI could not be competitive on price. The parties again offer substantially different explanations for the loss of business.

VSSI contends that Lavanture was receiving lower prices than it on parts from Honeywell and that Honeywell improperly allowed Lavanture to buy parts made from tooling paid for by VSSI. Honeywell, while implicitly acknowledging that...