Thoroughbred Ford, Inc. v. Ford Motor Co.

Decision Date15 August 1995
Docket NumberNo. 66196,66196
Citation908 S.W.2d 719
PartiesTHOROUGHBRED FORD, INC., Robert S. Porter, Roger W. Porter and Brenda K. Porter, Plaintiffs/Appellants, v. FORD MOTOR COMPANY and Ford Leasing Development Company, Defendants/Respondents.
CourtMissouri Court of Appeals

James C. Brandenburg, Brandenburg & Lownsdale, Clayton, for appellants.

Godfrey P. Padberg, Padberg, McSweeney, Slater, Merz & Graham, St. Louis, George E. Feldmiller, Stinson, Mag & Fizzell, P.C., Kansas City, for respondents.

SIMON, Judge.

Plaintiffs, Thoroughbred Ford (Thoroughbred), Robert Porter (Porter), Roger Porter (Roger) and Brenda Porter, appeal from the trial court's judgment granting judgment notwithstanding the verdict in favor of defendant Ford Motor Company (Ford) on plaintiffs' claim that Ford prevented them from selling the Thoroughbred motor vehicle franchise in violation of the Motor Vehicle Franchise Practices Act (MVFPA), §§ 407.810-.835 RSMo.1994. Plaintiffs also appeal from the trial court's grant of directed verdicts in favor of defendants, Ford and Ford Leasing Development Company (Ford Leasing), on plaintiffs' remaining claims alleging that Ford committed fraudulent misrepresentation and fraudulent concealment and breached the covenant of good faith and fair dealing implied in a franchise contract between the parties and that Ford Leasing violated the MVFPA and breached the covenant of good faith and fair dealing implied in a lease between the parties. Moreover, plaintiffs contend the trial court erred in making a number of rulings excluding various items from evidence. We affirm.

Viewed in the light most favorable to plaintiffs, the facts are as follows. In late 1984, Porter became interested in purchasing Schneider Ford, a Ford dealership located northeast of downtown Kansas City at the intersection of Independence and Paseo, an area that was declining economically. At trial, Porter testified that in May 1984, prior to his purchase of the dealership, he became concerned that the dealership was a "delete point," a Ford designation assigned to a dealership based upon market studies meaning that such a dealership will be "eliminated at the time of dealer change." Porter testified that he contacted by telephone Joseph Heisler, district sales manager for the Kansas City area Ford district, and Heisler assured Porter that the dealership was a "move point," not a "delete point." Porter contends Heisler additionally stated that Ford planned to move the dealership to the intersection of Interstate 29 and Barry Road, an area north of Kansas City near the airport. Heisler thought it would be an excellent location for a Ford dealership because of the area's strong economic growth potential. Porter testified that he was induced into buying the dealership by Heisler's representation that Ford planned to move the dealership to I-29/Barry Road.

Porter bought the Schneider Ford dealership and renamed it Thoroughbred Ford. The record does not indicate the date of this transaction. On July 5, 1984, Ford and Porter, acting as president of Thoroughbred, executed a Ford Sales and Service Agreement (FSSA), establishing Thoroughbred as an authorized Ford dealership and outlining Ford's responsibilities in producing and selling products to Thoroughbred and the dealership's duties in reselling the products and providing services for them. The parties also executed a Dealership Facilities Supplement, an addendum to the FSSA, which identified the intersection of Independence and Paseo as the authorized location for Thoroughbred's operation. The FSSA provided that Porter could not change the location of his dealership without the prior consent of Ford and the execution of a new Dealership Facilities Supplement. The FSSA further provided that Ford retained the right to determine, from time to time, in its best judgment, the numbers, location and sizes of authorized dealers necessary for satisfactory sales and service for its products in Thoroughbred's locality based on market studies.

On July 13, 1984, Porter opened the Thoroughbred dealership for business. Also on this day, Porter and Ford Leasing executed a 10-year lease agreement for the dealership facilities. Porter testified that he knew the facility was 20 years old but he did not ask Ford Leasing about the condition of any aspect of the facilities. The lease provided that the monthly rent was $5,124.00, that Porter was fully aware of the physical condition of the facilities and that he accepted the premises "as is."

Approximately every three or four years, an expert for Ford analyzes a multiple-dealership market such as the Kansas City metropolitan area, studying the economic condition of the market and the sales and service performance of each dealership and recommending what, if any, changes need to be made to the dealerships. When Porter became a Ford dealer, his location, based on the most recent market study of the Kansas City district, was a "monitored area of decline," a designation given to a dealership located in an area with declining business conditions. Ford may in its discretion eliminate a dealership under this designation. At trial, Porter testified that Ford did not tell him of this designation when he purchased Thoroughbred. Had he known of the designation, Porter contends, he would not have purchased the dealership. Heisler testified in a deposition that it was customary, and he thought necessary, for Ford to advise a prospective dealer of the economic conditions of the entire market and the specific location sought by the candidate.

In 1984, Ford conducted a study of the Kansas City metropolitan area market. The results of the survey, which indicated that Thoroughbred was located in a "monitored area of decline," were released in the fall of 1984. Porter was aware of the results of the study but testified that no one at Ford explained to him what the designation "monitored area" meant.

In March 1985, Porter's brother, Roger, became a partial owner and vice president of Thoroughbred. Roger testified that prior to investing $100,000.00 in Thoroughbred he had qualms about the viability of the dealership because it was located in an old area with no economic growth and increasing crime. Roger testified, however, that his brother persuaded him to invest in Thoroughbred by assuring him that Heisler said the dealership was a "move point" and could be relocated to a better site.

From July 1984 to July 1988, Thoroughbred completely remodeled the dealership facilities. The improvements, which included tuck-pointing, sandblasting and repainting and the installation of a new roof, track lighting, a new sound system and a paint booth with a mezzanine, were necessary according to Porter in order to maintain a clean facility which would attract customers. Thoroughbred asked Ford Leasing to cover the costs for some of the improvements with the understanding that its monthly lease payment would increase accordingly. By July 1988, Thoroughbred's monthly lease payment had increased to $8,126.00. Thoroughbred additionally spent approximately $75,000.00 of its own money to pay for some of the improvements.

From July 1984 to late 1987, Porter never had any discussions with Ford about relocating Thoroughbred nor did he investigate or price any specific property for such a relocation. During this time, Chuck Meyer replaced Heisler as the district sales manager for the Kansas City Ford district, and Armin Allen became the assistant district sales manager for the same district. Porter testified that he never informed Meyer that Heisler had given him an oral commitment to relocate Thoroughbred to I-29/Barry Road.

In 1987, Ford conducted another market study of the Kansas City area. On August 18, 1987, the study results were released at a meeting for all Kansas City area Ford dealers, which Porter and Roger attended. In a letter from Meyer to Porter dated October 22, 1987, Meyer reaffirmed the results of the study which designated the I-29/Barry Road area as a "future preferred location" and noted that the area "will require Ford representation in the future, but no action is planned at this time." Porter testified that he and his brother spoke with Meyer and Allen who told them that I-29/Barry Road was the preferred future site for Thoroughbred, that they should begin looking at property in that area and that they should write a letter to Ford "to get real estate people down here and start doing a site search." Roger testified that Meyer and Allen promised him and Porter that they could relocate to I-29/Barry Road if they sold a lot of vehicles.

In the summer of 1988, the Porters began discussing with Bob Sherwood and Ted Ehney, real estate developers for Executive Hills North, their interest in purchasing property located in the I-29/Barry Road area. In early September 1988, Meyer met with the Porters, Sherwood and Ehney and looked at an overview of a parcel of property for sale in the I-29/Barry Road area. Porter testified that he interpreted Meyer's comments after the meeting to mean that Meyer liked the site and felt it was an excellent location for a Ford dealership. Meyer told Porter to write him a letter indicating Thoroughbred's interest in acquiring this land and listing the parties who would have to be involved in the project. On September 14, 1988, Porter sent Meyer a letter stating that he had a commitment with the owners of 10 acres of land in the I-29/Barry Road area, that the area was growing rapidly, that the economic conditions near Thoroughbred were declining quickly, that he would like to relocate Thoroughbred as soon as possible and that the project required the participation of Ford, Ford Dealership Real Estate Sales Operation (Ford Real Estate) and Executive Hills.

On October 7, 1988, Ford Real Estate...

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