Rea v. Ford Motor Company, Civ. A. No. 67-286.

• Citation: 326 F. Supp. 627
• Decision Date: 05 May 1971
• Docket Number: Civ. A. No. 67-286.
• Parties: Edward C. REA and 22 Ford Inc. v. FORD MOTOR COMPANY.
• Court: U.S. District Court — Eastern District of Pennsylvania

326 F. Supp. 627

Edward C. REA and 22 Ford Inc. v. FORD MOTOR COMPANY.

Civ. A. No. 67-286.

United States District Court, W. D. Pennsylvania.

May 5, 1971.

Wayman, Irvin, Trushel & McAuley, Beck, McGinnis & Jarvis, Pittsburgh, Pa., for plaintiffs.

Eckert, Seamans & Cherin, Pittsburgh, Pa., for defendant.

OPINION AND ORDER GRANTING MOTION FOR PARTIAL SUMMARY JUDGMENT

KNOX, District Judge.

This is a complex action brought by Edward C. Rea, an individual, and a corporation of which he is the principal stockholder which acts as a Ford Motor Company Dealer in the sale and distribution of motor vehicles in Monroeville, Allegheny County, Pennsylvania. The defendant, Ford Motor Company, is a corporation of the State of Delaware with its principal place of business in the State of Michigan. The action is a diversity action as well as an action under the various anti-trust laws and under the Automobile Dealers Act (15 U. S.C. 1221, et seq.).

The complaint has several counts. The first cause of action is for breach of an alleged contract. The second cause of action with which we are primarily concerned on this motion asks reformation of an alleged option agreement dated December 29, 1966, and specific performance of the reformed agreement to convey certain real estate in Allegheny County, Pennsylvania to the plaintiff, Rea. The third cause of action alleges violation of the anti-trust laws of the United States and of the Robinson-Patman Act. The fourth cause of action asks damages for violation of the Automobile Dealers Act, supra. The fifth cause of action alleges an attempt to create a monopoly in violation of the Sherman Act and asks treble damages. The sixth cause of action alleges violation of the Clayton Act and lessening of competition in interstate commerce. The seventh cause of action with which we are also concerned in this motion asks that this court direct the Prothonotary of Allegheny County, Pennsylvania, to index this action as a lis pendens with respect to the real estate in question.

The case has been pending for upwards of four years during all of which time extensive discovery has been taking place, much of which was resisted by the defendant necessitating proceedings in the Eastern District of Michigan. Also, a controversy developed relative to discharge by plaintiff of his original counsel and controversy with respect to counsel's fees which has been recently resolved.

Early in the proceedings, the defendant took the position that plaintiff, Rea, did not have a sufficient memorandum in writing to satisfy the Pennsylvania Statute of Frauds (33 Purdon's Pa.Statutes 1); that all he had was an oral agreement which was denied by the defendant and insufficient facts were alleged to take the alleged contract out of the Statute of Frauds. For this reason, defendant claimed it was entitled to a partial summary judgment with respect to the second and seventh causes of action involving the conveyance of real estate. On July 21, 1967, the Honorable Rabe F. Marsh, now Chief Judge of this court, filed a Memorandum Opinion and Order which provided inter alia as follows:

"It is the opinion of this court that in the present state of the record, the defendant would be entitled to a summary judgment. When all facts are assumed in favor of the plaintiffs, all that is before the court is an oral agreement for an interest in land. Such agreement would be within the provisions of the Statute of Frauds and as such the agreement would have to be reduced to a writing to be enforceable. Thus, even if the court could reform the present lease, it would still be an oral agreement and as such unenforceable so that the court could not grant specific performance because to do so would be to enforce an oral agreement.

"This is fundamental law, but so too is it fundamental law that the writing needed can be a series of writings. Thus, since the period of discovery has been extended through mutual consent of the parties, it is the opinion of this court that the motion for summary judgment is premature.

"NOW, THEREFORE, this 21st day of July, 1967, IT IS ORDERED AND DIRECTED that Defendant's Motion for Partial Summary Judgment will be, and hereby is, denied without prejudice with leave to renew such a motion at a more appropriate time."

Defendant thereafter renewed its Motion for Partial Summary Judgment before the Honorable Herbert P. Sorg, District Judge, who on February 19, 1970, likewise entered an order which provided inter alia that the same be denied without prejudice to the right of the defendant to renew its motion upon completion of discovery.

It appears that discovery has now been completed and the defendant again renews its motion claiming that there is no right of specific performance because of the Statute of Frauds.

A matter of procedure should be disposed of first. Plaintiff claims that this is not a proper case for partial summary judgment under the Rules of Civil Procedure. However, since there are separate claims or causes of action contained in this complaint, a summary judgment as to certain of these causes of action appears proper under Rule 56(b)¹. See also Rule 54(b) which provides for the entry of a final judgment as to one or more but fewer than all of the claims.²

The court of appeals for this circuit has held that there should be no partial summary judgment for a portion of a single claim. See Coffman v. Fed. Laboratories, 171 F.2d 94 (3d cir. 1948); RePass v. Vreeland, 357 F.2d 801 (3d cir. 1966). The supreme court, however, has specifically held that a partial summary judgment covering one or more claims may be entered when the claims are entirely distinct. Reeves v. Beardall, 316 U.S. 283, 62 S.Ct. 1085, 86 L. Ed. 1478 (1942).

As previously pointed out, there are seven causes of action set forth in this complaint and while the claims of the plaintiffs with regard to this real estate may be in a certain sense intertwined in all the causes of action, nevertheless, it is our opinion that the claims for reformation of the option agreement for specific performance and lis pendens as set forth in the second and seventh causes of action are separate claims as to which partial summary judgment may be entered separately. We now turn to the merits of the motion.

The Act of 29 Charles II, c. III, is not in effect in Pennsylvania. However, the rule that a contract for sale of real estate must be in writing is provided by Pennsylvania's own act of March 31, 1772, 1 Smith's Laws 389 (33 Purdon's Pa.Statutes 1).³

While the exact meaning of some of this antiquated language in the law may seem obscure to some, it has always been held by the Pennsylvania Supreme Court that the statute means that contracts for sale of real estate must be in writing. See Gerlock v. Gable, 380 Pa. 471, 112 A.2d 78 (1955). If it is necessary to prove any essential feature of a contract to convey real estate by oral testimony, the contract is not in writing as required by the Statute of Frauds. Shaw v. Cornman, 271 Pa. 260, 114 A. 632 (1921). This statute is a declaration of public policy and is a limitation on judicial remedy unless renounced or waived. Haskell v. Heathcote, 363 Pa. 184, 69 A.2d 71 (1949).

There are certain exceptions. The purpose of the statute is to prevent perjury. If the defendant admits making the contract either in his pleadings or in his testimony, an oral contract will be enforced. Zlotziver v. Zlotziver, 355 Pa. 299, 49 A.2d 779 (1947). Another exception is where there has been performance or part performance on the part of the purchaser, involving taking possession under the contract and making improvements which cannot be compensated in damages. Klingensmith v. Klingensmith, 375 Pa. 178, 100 A.2d 76 (1954). Under this principle, it has been held that where the lessee of a shopping center, in possession under a parol modification of his original lease, has expended large sums for permanent improvements, to wit, erecting a large building in excess of that specified in the lease, the lessor will not be permitted to assert the Statute of Frauds as a defense. Ridley Park Shopping Center, Inc. v. Sun Ray Drug Co., 407 Pa. 230, 180 A.2d 1 (1962).

Another aspect of the Statute has an important bearing upon our case. It is provided that the writing must be "signed by the parties so making or creating the same, or their agents, thereunto lawfully authorized by writing".

In the case of corporations, this means that the authority of an employee to sign a contract for the sale of real estate must be in writing excepting only the authority of executive officers of a corporation. Rosenblum v. New York Cent. R. Co., 162 Pa.Super. 276, 57 A.2d 690 (1948) (land agent not authorized); Henry v. Black, 210 Pa. 245, 59 A. 1070 (1904) (treasurer held authorized).

With these basic principles in mind, an examination of all the voluminous depositions and exhibits on file in this case, makes it painfully obvious that we still have only an oral agreement for conveyance of land. This is prohibited by the Statute of Frauds unless admitted by the defendant. This conclusion is reached after giving the plaintiffs the benefit of every doubt. Plaintiff is still unable to point to any writing or series of writings signed by any executive officer of Ford Motor Company or by any agent authorized in writing as required by the statute agreeing to convey this real estate to him. Nor can any definite terms of any arrangement be worked out of all the exhibits in this testimony. All that appears is some evidence of negotiations looking eventually to working out some arrangement between Ford and the plaintiff. Plaintiff's testimony does show that there had been discussion of two arrangements, one whereby the plaintiff, Rea, would purchase the property, lease the same to Ford with a sublease back to Rea or his designated corporation as a subtenant. It is claimed that the rentals from this lease would amortize a mortgage for the purchase...