Stansifer v. Chrysler Motors Corporation

• Decision Date: 30 October 1973
• Docket Number: No. 71-2460.,71-2460.
• Citation: 487 F.2d 59
• Parties: George L. STANSIFER, dba Lakewood Sports Cars, Plaintiff-Appellant, v. CHRYSLER MOTORS CORPORATION, and J. O. Fisher Corporation (Jim Fisher Motors), Defendants-Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

487 F.2d 59 (1973)

George L. STANSIFER, dba Lakewood Sports Cars, Plaintiff-Appellant, v. CHRYSLER MOTORS CORPORATION, and J. O. Fisher Corporation (Jim Fisher Motors), Defendants-Appellees.

No. 71-2460.

United States Court of Appeals, Ninth Circuit.

October 30, 1973.

COPYRIGHT MATERIAL OMITTED

C. R. Lonergan (argued), Ray Siderius, Siderius, Lonergan & Crowley, Seattle, Wash., for plaintiff-appellant.

Carl H. Hagens (argued), Skeel, McKelvy, Henke, Evenson & Betts, Richard L. Prout, Mullavey, Hageman, Prout & Kirkland, Seattle, Wash., for defendants-appellees.

Before MERRILL and KOELSCH, Circuit Judges and JAMESON,^* District Judge.

JAMESON, District Judge:

This appeal is from an order granting summary judgment for defendants-appellees, Chrysler Motors Corporation and J. O. Fisher Corporation (Jim Fisher Motors), in an action by plaintiff-appellant, George L. Stansifer, d/b/a Lakewood Sports Cars, for injunctive relief and damages, based upon alleged violations of the Federal and Washington State Automobile Dealer's Day in Court Acts, 15 U.S.C. § 1221 et seq.¹ and R.C.W. 46.70.180 et seq.²

Statement of Facts

Based upon the pleadings, depositions, affidavits, and other discovery, the relevant facts may be summarized as follows:

On February 1, 1964 Stansifer entered into a written dealer agreement with J. O. Fisher Corporation, then wholesale regional distributor for foreign made Rootes automobiles in the States of Washington and Oregon. On March 15, 1965 a similar agreement was executed with respect to foreign made Simca automobiles. In October, 1965 the J. O. Fisher Corporation was dissolved, and Jim Fisher Motors, a sole proprietorship, became successor to the corporation's business.

In early 1966 Chrysler Corporation acquired controlling interests in the foreign corporations which manufactured Rootes and Simca automobiles. On February 7, 1966, Chrysler Motors Corporation, a wholly owned subsidiary of Chrysler Corporation, entered into written non-exclusive distributor agreements with Jim Fisher Motors under which Fisher was to operate as distributor and wholesaler of Rootes and Simca automobiles in Washington and Oregon. On February 23, 1966 Fisher entered into dealer agreements with Stansifer, appointing him non-exclusive dealer of Rootes and Simca automobiles in the City of Tacoma, Washington, and Pierce County and vicinity. Stansifer operated under these agreements from 1966 through 1969.

Following negotiations initiated by Fisher, on December 23, 1969 Fisher and Chrysler agreed to terminate Fisher's distributorship, effective December 5, 1969, with Chrysler assuming certain repurchase obligations of Fisher to its dealers and agreeing to indemnify Fisher for losses resulting from claims by Fisher's dealers arising out of Chrysler's failure to reappoint such dealers.

Under the terms of Fisher's dealer agreements, the termination of the relationship between Fisher and Chrysler automatically terminated all of Fisher's dealer agreements, including those with Stansifer.³ On January 1, 1970, Stansifer received a letter from Fisher notifying him that his "dealer agreements were automatically terminated effective December 5, 1969".

On January 15, 1970 Nigel Burn, Chrysler's import representation manager, and R. J. Ozburn, regional manager of Chrysler-Plymouth, called on Stansifer, presented him with two documents, and requested that he sign one of them. The first was a one-year dealer direct term agreement for the sale of Rootes and Simca automobiles. The second was a letter acknowledging notice of the termination of the Fisher distributor agreements with Chrysler and reading in part:

"On this date, (a) representative(s) of Chrysler Motors Corporation offered this company a twelve (12) month Term Sales Agreement for the purpose of allowing us time during which to qualify for regular Simca (and) Rootes Dealer Agreements with Chrysler Motors Corporation.

"This letter is to advise you that, upon consideration, we hereby decline the opportunity to qualify for Simca (and) Rootes Dealer Agreements with you."

Stansifer declined to sign either agreement.⁴ This action was filed on February 3, 1970.

Proceedings in District Court

Appellant's complaint alleged violations of the Federal and Washington State Dealer's Day in Court Acts, based upon his version of what occurred during the January 15 negotiations with the Chrysler representatives. Specifically he alleged that the "defendants conspired to unlawfully terminate his non-exclusive dealership", attempted to coerce him to accept unwanted automobiles, threatened to cancel his dealership if he refused to accept the unwanted automobiles, and threatened to refuse to compensate him for his capital investment in new cars, equipment, tools and parts.

Separate answers were filed by the defendants, followed by a joint motion for summary judgment of dismissal. In support of the motion Chrysler contended that the absence of a written franchise with Stansifer precluded any recovery under the Federal Dealer's Day in Court Act. Fisher contended that there was no allegation or proof of any wrongdoing on his part and that any wrongdoing on the part of Chrysler's representatives would not be attributable to him. Both appellees argued that under the Washington Act no claim may be stated if a claim under the Federal Act is dismissed with prejudice.

At the close of a hearing on March 12, 1971 the court announced that the defendants' motion for summary judgment would be granted.⁵ A formal order was entered June 14, 1971, the court concluding that the claim of appellant "cannot come within the purview of either the federal or state Dealer's Day in Court Act".⁶

Summary Judgment

Summary judgment of course is proper only where there is no genuine issue of any material fact or where viewing the evidence and the inferences which may be drawn therefrom in the light most favorable to the adverse party, the movant is clearly entitled to prevail as a matter of law.⁷ Where, however, "on the basis of the materials presented by his affidavits, the moving party, if at trial, would be entitled to a directed verdict unless contradicted, it rests upon the opposing party at least to specify some evidence to show that such contradiction is possible. * * * The burden of coming forward with specific controverting facts shifts to the opponent. * * * It is his duty to expose the existence of a genuine issue which will prevent the trial from being a useless formality." Doff v. Brunswick Corporation, 372 F.2d 801, 805 (9 Cir.1967), cert. denied, 389 U.S. 820, 88 S.Ct. 39, 19 L.Ed.2d 71 (1967).⁸ In determining whether the summary judgment was proper under these rules we accept the testimony of appellant as set forth in his affidavit and deposition, even though contradicted in part by other testimony.

Claim against Chrysler under Federal Act

The Automobile Dealer's Day in Court Act (also referred to as The Automobile Dealer's Franchise Act), 15 U.S.C. §§ 1221-1225, created a new cause of action in favor of a franchised automobile dealer against an automobile manufacturer for damages sustained "by reason of the failure of said automobile manufacturer * * * to act in good faith in performing or complying with any of the terms or provisions of the franchise, or in terminating, canceling, or not renewing the franchise". It is obvious that the Act does not apply until a manufacturer-dealer relationship has been created.

The term "franchise" is defined in 15 U.S.C. § 1221(b) as "the written agreement or contract between any automobile manufacturer engaged in commerce and any automobile dealer which purports to fix the legal rights and liabilities of the parties to such agreement or contract." It is clear that without a written franchise there can be no claim or cause of action under the Act.⁹

There was no written agreement between Chrysler and Stansifer. The written agreements were between Chrysler as manufacturer and Fisher as distributor and between Fisher as distributor and Stansifer as dealer. Nor is there any evidence that Chrysler had any direct dealings with Stansifer prior to the termination of the dealer agreement between Fisher and Stansifer.

Appellant contends that Fisher was a "straw man" or agent of Chrysler, and that the agreements between Fisher and Stansifer were in fact between Chrysler and Stansifer. It is true, as appellant argues, that Chrysler could not "avoid requirements of the Dealer Franchise Act relating to manufacturers by merely setting up a `straw man' between it and the dealer and then stating that it had no franchise with any dealer * * *."¹⁰ The district court found as a matter of law, however, that "the facts in this case in no way support a claim that Jim Fisher was a straw man or an agent of the Chrysler Motors Corporation * * *." We agree.

Was Fisher the Agent of Chrysler?

Restatement of the Law of Agency, 2d (1958) defines "agency" in § 1 as follows:

"Agency is the fiduciary relation which results from the manifestation of consent by one person to another that the other shall act on his behalf and subject to his control, and consent by the other so to act."

This definition of agency has been accepted and followed by the Supreme Court of Washington in numerous cases, including McCarty v. King County Medical Service Corp., 26 Wash.2d 660, 175 P.2d 653, 664 (1946), where the court emphasized that control of the conduct of the agent is "the vitally essential element in the relationship of principal and agent".¹¹

§ 14 J of the Restatement relating to "Agent or Buyer" reads:

"One who receives goods from another for resale to a third person is not thereby the other\'s agent in the transaction: whether he is an agent for this purpose or is himself a buyer depends upon whether the parties agree that his duty is to act primarily for the benefit of the one delivering the goods to him or is to act primarily for his own benefit."

§ 15 of the Restatement relating...