Peoples Outfitting Co., Inc. v. General Elec. Credit Corp., Inc., 76-1146

Decision Date17 February 1977
Docket NumberNo. 76-1146,76-1146
Citation549 F.2d 42
PartiesPEOPLES OUTFITTING COMPANY, INC., Plaintiff-Appellant, v. GENERAL ELECTRIC CREDIT CORP., INC., Defendant-Appellee.
CourtU.S. Court of Appeals — Seventh Circuit

Marvin Mitchell, Indianapolis, Ind., for plaintiff-appellant.

Harry T. Ice, Indianapolis, Ind., for defendant-appellee.

Before CLARK, Associate Justice, * SPRECHER, Circuit Judge and CAMPBELL, Senior District Judge. **

WILLIAM J. CAMPBELL, Senior District Judge.

Plaintiff-Appellant Peoples Outfitting Company, Inc. (Peoples) appeals an order of the district court granting summary judgment in favor of defendant-appellee General Electric Credit Corp. (GECC). Peoples alleged in a five-count complaint breaches of both oral and written contract, intentional interference with prospective business advantage and fraud. We affirm the granting of summary judgment in favor of GECC on the fraud count; we reverse and remand on the contract counts. 1

The record in this case indicates that Peoples operates a retail furniture store in Indianapolis, Indiana, and that GECC is a New York corporation engaged in the business of buying retail credit sales accounts at a discount from retail establishments. On July 6, 1970 the parties executed a document purporting to establish a business arrangement. On this date, Peoples' President Hester indicated to GECC's District Sales Manager Bundy that he wanted certain paragraphs of the printed form entitled "Agreement, Non-Recourse Plan" deleted, and that he desired certain prior letters addressed to him from GECC to be made a part of the final agreement. Pursuant to his wishes, certain paragraphs were lined out of the printed agreement. Bundy then wrote after the last paragraph of the printed form: "See agreement letters for other representations". Having initialed this writing, Bundy and Hester executed the agreement, back dating the effective date to July 1, 1970. Copies of the "Letter Agreements" were physically attached to the printed form agreement.

The "Letter Agreements" consist of two letters addressed to Hester from Bundy. The first, dated October 29, 1969, contains the handwritten words "Acceptable Range 17-18% of Rejects." To the left of these words are the handwritten words "They said our rejects would run" with arrows pointing to the word "Range". The second letter, dated November 25, 1969, contains the following paragraph:

"REJECTS We feel that the reject percentage will average approximately 17-18% of the number of submitted contracts. This will vary by store location and possibly by season."

The printed form agreement contains the following provisions:

"We (Peoples) desire from time to time to sell you (GECC) conditional sales contracts, lease agreements, chattel mortgages, notes, and other choses in action (hereinafter designated as accounts), arising from the bona fide sale or lease and delivery by us of appliances and equipment (hereinafter designated equipment). In consideration of your purchase of such accounts that are acceptable to you and your paying as the prices you shall from time to time establish, we hereby agree as follows . . . .

". . . Nothing in this agreement shall be construed to obligate us (Peoples) to sell accounts to you (GECC) or to obligate you to purchase such accounts."

On the basis of this language contained in the printed form agreement, the district court concluded that there was no binding contract. "Even when coupled with the 'letter agreement' this language neither obligates the plaintiff to sell nor the defendant to buy the credit paper possessed by plaintiff." (Order on Motion for Summary Judgment, December 31, 1975, p. 4).

Our review of the record indicates a genuine issue of material fact with respect to GECC's intent to obligate itself to purchase Peoples' accounts. Hence we find summary judgment inappropriate in this case. Furthermore, we find that the district court erred in construing the documents alleged to establish the contractual basis of the business arrangement.

At the outset we note that summary judgment is to be applied with caution. International Association of M. & A. W. Dist. No. 8 v. Clark Company, 471 F.2d 694, 697 (7th Cir. 1972). Further, the granting of summary judgment, while a drastic remedy, is a wholesome one where applicable to the circumstances, and is never warranted except on a clear showing that no genuine issue as to any material fact remains for trial. Mintz v. Mathers Fund, Inc., 463 F.2d 495, 498 (7th Cir. 1972).

We find that the handwritten words on the October 29, 1969 letter, and the typewritten paragraph of the November 25, 1969 letter, both indicating that GECC's reject rate on submitted credit accounts would be approximately 17 to 18%, present a genuine issue of material fact as to whether or not GECC impliedly intended to obligate itself to purchase those accounts outside the range represented by the reject percentage rate. Issues of intent are particularly inappropriate for disposition under Rule 56. Staren v. American National Bank and Trust Co. of Chicago, 529 F.2d 1257, 1261-62 (7th Cir. 1976); Conrad v. Delta Air Lines, Inc., 494 F.2d 914, 918 (7th Cir. 1974); see also 6 Pt. 2 Moore's Federal Practice P 56.17(41-1). In this case, the printed form agreement and the attached "letter agreements" reflect the parties' understanding that only acceptable accounts would be purchased by GECC. The extent, if any, of GECC's obligation to purchase those accounts should be determined by the trier of fact. By granting GECC's motion for summary judgment, the district court reached a factual conclusion that GECC did not intend to obligate itself to purchase Peoples' accounts. Such a conclusion is improperly reached on a motion for summary judgment.

We also do not agree with the district court's holding that the non-obligation clause of the printed form agreement controls the entire agreement with the result that the contract is unenforceable. The reject percentage provisions contained in the "letter agreements," which we find raise an issue of fact as to GECC's intent to obligate itself to purchase those accounts not within the range expressed by the reject percentage rate, are arguably inconsistent with the non-obligation clause of the printed form agreement. 2 Since the reject percentage provisions are contained in a typewritten letter in...

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    • United States
    • U.S. District Court — Northern District of Indiana
    • October 18, 1984
    ...and must draw all inferences from the established or asserted facts in favor of the non-moving party. Peoples Outfitting Co. v. General Electric Credit Corp., 549 F.2d 42 (7th Cir.1977). A party may not rest on the mere allegations of his pleadings or the bare contentions that an issue of f......
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    ...and must draw all inferences from the established or asserted facts in favor of the non-moving party. Peoples Outfitting Co. v. General Electric Credit Corp., 549 F.2d 42 (7th Cir.1977). A party may not rest on the mere allegations of his pleadings or the bare contentions that an issue of f......
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    ...as to the existence of a genuine issue of a material fact are drawn in favor of the non-moving party. Peoples Outfitting Co. v. General Electric Credit Corp., 549 F.2d 42 (7th Cir.1977); Kennett-Murray Corp. v. Bone, 622 F.2d 887 (5th Cir.1980); generally C. Wright, Law of Federal Courts, 4......
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