Van Dyke Ford, Inc. v. Ford Motor Company

• Decision Date: 14 August 1975
• Docket Number: No. 75-C-45.,75-C-45.
• Citation: 399 F. Supp. 277
• Parties: VAN DYKE FORD, INC., et al., Plaintiffs, v. FORD MOTOR COMPANY et al., Defendants.
• Court: U.S. District Court — Eastern District of Wisconsin

399 F. Supp. 277

VAN DYKE FORD, INC., et al., Plaintiffs, v. FORD MOTOR COMPANY et al., Defendants.

No. 75-C-45.

United States District Court, E. D. Wisconsin.

August 14, 1975.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Robert F. Wood, P. C., Rochester, N. Y., for plaintiff; Jerome H. Block, Appleton, Wis., of counsel.

Whyte, Hirschboeck, Minahan, Harding & Harland, Robert V. Abendroth, Don S. Peterson, Milwaukee, Wis., for Thorp Sales.

Michael, Best & Friedrich, John K. MacIver, Rickard T. O'Neil, David J. Cannon, Milwaukee, Wis., for Stumpf Properties, Les Stumpf Ford & Les Stumpf.

Foley & Lardner, Steven E. Keane, Maurice J. McSweeney, Geoffrey R. Greiveldinger, Milwaukee, Wis., for Ford Motor Co. & Ford Marketing.

Quarles & Brady, Thomas Kloehn, Milwaukee, Wis., for Appleton & Sherwood Banks.

DECISION and ORDER

MYRON L. GORDON, District Judge.

This is a ten-count action brought by several plaintiffs, each of whom had some association with an auto dealership in Kaukauna, Wisconsin. The defendants include Ford Motor Company and Ford Marketing Corporation (the Ford defendants), Thorp Sales Corporation (Thorp), Sherwood State Bank (Sherwood), Appleton State Bank (Appleton), and Les Stumpf, Les Stumpf Ford, Inc., Stumpf Leasing, Inc., and Stumpf Properties, Inc. (the Stumpf defendants). Plaintiffs allege that these defendants, in various ways and combinations, improperly contributed to the failure of the Kaukauna dealership.

Motions to dismiss the complaint, and to dismiss certain counts thereof, have been filed by several of the defendants. Motions to strike certain matter from the complaint as immaterial and scandalous and to require the plaintiffs to make a more definite statement of their claim have also been filed by the defendant Appleton. A motion to bar the taking of the deposition of one individual has also been filed.

I. DEFENDANT THORP'S MOTION TO DISMISS

Defendant Thorp has moved to dismiss eight counts of the complaint pursuant to Rule 12(b)(1), Federal Rules of Civil Procedure, for lack of jurisdiction over the subject matter, to dismiss one count pursuant to Rule 12(b)(2) for lack of jurisdiction over the person, and to dismiss the entire complaint pursuant to Rule 12(b)(6) for failure to state a claim upon which relief can be granted.

The plaintiffs acknowledge that the only federal claim presented against Thorp is that of violating sections 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1, 2, as set forth in count 4 of the complaint. The solitary allegation of the complaint with respect to Thorp states:

"31(V). Subsequent to the signing of said `surrender' agreement, the Defendants and each of them colluded and cooperated with each other to dispose of the remaining assets of the Kaukauna dealership in such a way so as to benefit themselves and in total disregard of the interests and rights of Plaintiffs. Among other things, Defendants colluded with Defendant Thorp Sales Corporation to insure that Defendant Les Stumpf would secure automobiles, parts, supplies, equipment and other assets of the Kaukauna dealership far below their reasonable market value and below their normal value at auction."

I believe that this allegation, construed liberally, is insufficient to state a claim against Thorp under the relevant sections of the Sherman Act. The complaint does not allege that Thorp was a member of a conspiracy in violation of the antitrust laws, but only states that Thorp colluded with other defendants to auction off plaintiffs' assets. There is no allegation that such collusion constituted a conspiracy in restraint of trade or that Thorp at any time joined the alleged conspiracy by other defendants to restrain and monopolize trade.

The complaint also includes an ambiguous allegation against unidentified "defendants" that:

"46. For many years past, . . Defendants have combined, contracted and conspired and continued to combine, contract and conspire to monopolize and unreasonably restrain trade and commerce in markets in the Fox River Valley area, State of Wisconsin, and throughout the United States, and have attempted to monopolize, monopolize, substantially lessened competition, . . . ."

Such a conclusory statement, merely alleging a violation in the words of the statute, is also insufficient in the absence of any allegations of Thorp's participation in a conspiracy or monopoly. Homan Manufacturing Co. v. Russo, 233 F.2d 547 (7th Cir. 1956). See also Klebanow v. New York Produce Exchange, 344 F.2d 294 (2d Cir. 1965), and Hohensee v. Akron Beacon Journal Publishing Company, 277 F.2d 359 (6th Cir. 1960). Accordingly, Thorp's motion to dismiss count 4 will be granted.

In the absence of diversity, the dismissal of the only federal claim against Thorp requires the dismissal of the plaintiffs' pendent state law claims against Thorp. Asher v. Harrington, 461 F.2d 890 (7th Cir. 1972); Hampton v. Chicago, 484 F.2d 602 (7th Cir. 1973); Ace Van Lines & Movers, Inc. v. Republic Van & Storage Co., 369 F. Supp. 61 (E.D.Wis.1973). Therefore, Thorp's motion to dismiss the complaint will be granted. Consequently, it is unnecessary to consider Thorp's challenges to the sufficiency of each of the state counts for failure to comply with Rule 9(b), Federal Rules of Civil Procedure, or with state law.

II. SHERWOOD'S MOTION TO DISMISS

Defendant Sherwood has moved to dismiss the complaint pursuant to Rule 12(b) (1) and 12(b) (6) for want of subject matter jurisdiction and for failure to state a claim upon which relief can be granted.

Plaintiffs agree that there is but one federal claim made against Sherwood, namely that of violating sections 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1-2, as set forth in count 4 of the complaint.

The only allegations which might be construed to refer to Sherwood state:

"23. The Defendants, and each of them, by and through their agents, officers, employees and representatives made certain statements for the purpose of inducing Plaintiffs to rely upon them and to enter into certain agreements and to otherwise alter and change their position. These statements, promises and representations were false and fraudulent when made and the said Defendants knew or had reason to know that they were false and fraudulent when they made them."

Subsequent paragraphs of the complaint contain the plaintiffs' allegations of such fraudulent representations by each defendant. Of these, only paragraph 27 deals with Sherwood, and it is no more specific than paragraph 23:

"27. Defendant Sherwood State Bank and Defendant Thorp Sales Corporation, by and through their agents, officers, employees and representatives, made certain statements and representations to Plaintiffs for the purpose of inducing Plaintiffs to rely upon them and to enter into various agreements, and to otherwise alter and change their position, all as more particularly hereinafter set forth."

No such "certain statements and representations" by Sherwood are thereafter set forth.

Paragraph 31(V), alleging collusion and cooperation by each of the defendants in a fraudulent sale of the plaintiffs' assets, and paragraph 46, alleging in conclusory language a conspiracy by "defendants" in violation of sections 1 and 2 of the Sherman Act, could each possibly be construed as referring to Sherwood. These paragraphs are reproduced above in the discussion of defendant Thorp's motion to dismiss.

I believe that paragraphs 23 and 27, alleging unspecified fraudulent representations, add nothing to the purported antitrust allegations of paragraphs 31(V) and 46. Even if the additional allegations were sufficiently specific to state a claim for fraud, which they are not, there is no suggestion that the fraud was related to an antitrust conspiracy. Accordingly, the federal claim against Sherwood will be dismissed for the reasons which governed the dismissal of the same claim against Thorp. It also follows that the pendent state law claims against Sherwood, like those against Thorp, will be dismissed, and the motion of Sherwood to dismiss the complaint will be granted.

III. APPLETON'S MOTIONS

The defendant Appleton has moved to dismiss the action pursuant to Rule 12(b) (1) and 12(b) (6) for want of subject matter jurisdiction and for failure to state a claim upon which relief can be granted. Appleton has also moved to strike "certain immaterial and scandalous matter" from the complaint pursuant to Rule 12(f) and, in the alternative, to require plaintiffs to make a more definite statement of their claim.

A. APPLETON'S MOTION TO DISMISS

The only federal claim which the plaintiffs have presented against Appleton, like their claims against Thorp and Sherwood, is that of count 4, alleging violation of sections 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1, 2. In addition to several allegations of fraudulent misrepresentation and breach of contract, the antitrust count alleges, in part:

"31. (B) Instead of assisting and cooperating with Plaintiffs, as promised, Defendants Company, Marketing, Stumpf and Appleton State Bank colluded and cooperated with each other, when it suited their purposes, in efforts to extract more and more funds from Plaintiffs, and when such funds were not forthcoming, to compel Plaintiffs' termination and force them out of business.

"(Q) Defendant Appleton State Bank frequently and unreasonably refused to accept retail paper from Plaintiffs and, when the same paper or sale was offered to said Defendant by Defendant Stumpf, Defendant Appleton State Bank accepted same.

"(T) When Plaintiffs attempted to secure the necessary financing from other sources, Defendant Appleton State Bank offered and supplied false information to other lending institutions regarding the status of Plaintiffs' accounts and financial condition for the purpose of insuring that Plaintiffs would be unable to secure such other financing."

The allegations of paragraphs 31(V) and 46, reproduced above in the discussion of Thorp's motion to...