Volvo Trademark Holding v. Ais Const. Equip., Civ.A. 1:00CV238.
| Decision Date | 16 February 2006 |
| Docket Number | No. Civ.A. 1:01CV232.,No. Civ.A. 1:00CV238.,Civ.A. 1:00CV238.,Civ.A. 1:01CV232. |
| Court | U.S. District Court — Western District of North Carolina |
| Parties | VOLVO TRADEMARK HOLDING AKTIEBOLAGET, a Swedish corporation; Volvo Construction Equipment North America, Inc., a Delaware corporation; and Champion Road Machinery Limited, a Canadian corporation, Plaintiffs, v. AIS CONSTRUCTION EQUIPMENT CORPORATION, a Michigan corporation; CLM Equipment Company, Inc., a Texas corporation; Future Equipment Company, Inc., a Texas corporation; and Clark Machinery Company, an Arkansas corporation, Defendants. AIS Construction Equipment Corp., a Michigan corporation; CLM Equipment Co., Inc., a Louisiana corporation; Future Equipment Co., a Texas corporation; and Clark Machinery Co., an Arkansas corporation, Plaintiffs, v. Volvo Construction Equipment North America, Inc., a Delaware corporation; and Champion Road Machinery, Ltd., a Canadian corporation, Defendants. |
Albert Diaz, Hunton & Williams, Charlotte, Carolyn A. Dubay, Hunton & Williams, Raleigh, NC, John Gary Maynard, Michael J. Lockerby, Hunton & Williams, Richard, VA, Nash E. Long, III, Hunton & Williams, Hunton & Williams LLP, Charlotte, NC, Stephen P. Demm, Hunton & Williams, Richmond, VA, T. Thomas Cottingham, III, Hunton & Williams, Charlotte, NC, for Plaintiffs.
Edward Louis Bleynat, Jr., Ferikes & Bleynat, Ferikes & Bleynat, PLLC, Ashville, NC, J. Michael Dady, Ronald K. Gardner, Scott E. Korzenenowski, John D. Holland, Day & Gardner, P.A., Minneapolis, MN, for Defendants.
THIS MATTER is before the Court on motion of Clark Machinery Limited ("Clark") to strike the reply memorandum of Volvo Construction Equipment North America ("Volvo CE") and Champion Road Machinery Limited ("Champion Road") (collectively "Volvo"), Volvo's opposition thereto, Clark's motion for summary judgment, and Volvo's cross-motion for summary judgment.
This case began over five years ago with numerous parties, claims, counterclaims, and defenses. When this case was originally before the Court, summary judgment was granted in favor of Volvo as to all claims against them by the Defendants. See Volvo Trademark Holding Aktiebolaget v. CLM Equip. Co., 236 F.Supp.2d 536 (W.D.N.C.2002). The Defendants, including Clark, appealed the Court's decision to the Fourth Circuit Court of Appeals, which affirmed on all grounds but one—Clark's claim under the Arkansas Franchise Practices Act (AFPA) for termination of its franchise without "good cause." See Volvo Constr. Equip. N. Am., Inc. v. CLM Equip. Co., 386 F.3d 581 (4th Cir.2004). The Fourth Circuit held, inter alia, that the AFPA represented fundamental policy of Arkansas, that the parties could not waive application of the Act, and that a genuine issue existed regarding whether Volvo terminated the Dealership Agreement with the requisite "good cause." Id. Inasmuch as a comprehensive review of the facts in this case has been previously undertaken by this Court and the Fourth Circuit, only those facts necessary for a determination of the one remaining claim will be set forth below.
Clark is a retail dealer of large earthmoving motor graders. Id., at 587. On September 25, 1984, Champion Road and Clark entered into a Distributor Sales Agreement, whereby Clark was appointed as an authorized distributor of the "700 Series" Champion Road motor grader.
Clark's area of primary responsibility consisted of 57 counties in Arkansas. See, Exhibit A, Distributor Sales Agreement, effective September 25, 1984, attached to Affidavit of Michael J. Lockerby, filed September 22, 2005. The relationship between Champion Road and Clark continued, apparently in a substantially unchanged manner, until Volvo acquired Champion Road in 1997. After the acquisition, Volvo and Champion Road entered into an Agreement, the material terms of which were as follows: Volvo and Champion Road manufactured and sold different products for the construction and road building market that complemented each other; the market share and profits of the companies could be increased by using the same dealers for both product lines; obtaining this result required terminating relationships with some dealers; and Champion Road appointed Volvo as its exclusive agent in regards to, among other things, determining which relationships should be terminated. See, Exhibit G, Agreement between Champion Road and Volvo, dated September 11, 1997, attached to Affidavit of Scott E. Korzenowski, filed October 21, 2005.
By letter dated October 10, 2000, Volvo informed Clark that it was one of the dealers being terminated effective on January 9, 2001. See, Exhibit D, Letter from John Beckmann to Odell Pheiffer, dated October 10, 2000, attached to Lockerby Affidavit. Volvo's letter stated that "Champion has assigned or otherwise transferred its interests under the Dealer Agreement to Volvo," and that Volvo was terminating the Agreement pursuant to the provision allowing terminations without cause. Id. Clark advised that the provisions of the AFPA had not been "addressed" by Volvo, and acknowledged that, like Volvo, Clark hoped to resolve the situation; however, no mutually satisfactory resolution was reached. See, Exhibit E Letter from Odell Pfeiffer to John Beckmann, dated November 10, 2000, attached to Lockerby Affidavit.
Volvo filed its declaratory judgment complaint in this Court on October 10, 2000, naming Clark as a defendant. See Complaint in Civil No. 1:00cv238 (the North Carolina Litigation), filed October 10, 2000. Clark answered and also asserted a counterclaim against Volvo for violation of the AFPA. See Answer and Counterclaim, filed September 17, 2001. In March 2001, Clark and the other defendants filed an action in the United States District Court for the Eastern District of Arkansas, asserting the counterclaims of the action pending here as claims in the Arkansas litigation. The federal court in Arkansas transferred that litigation to this Court on August 30, 2001, and the cases were consolidated. See, Complaint in Civil No. 1:01cv232 (the Arkansas Litigation), filed March 20, 2001; Order of Chief U.S. District Court Judge Susan Wright for the Eastern District of Arkansas, filed August 30, 2001; Memorandum and Order, filed January 9, 2002 (denying motion to dismiss and granting motion to consolidate cases).
After the Defendants' appeal to the Fourth Circuit, the only remaining claim is Clark's statutory claim (in the Arkansas litigation) and statutory counterclaim (in the North Carolina litigation)—which are identical—against Volvo for violation of the AFPA by terminating Clark's franchise without "good cause." See Volvo Constr., 386 F.3d at 611. Both parties have moved for summary judgment on this claim.
When a party makes a properly supported motion for summary judgment, the burden shifts to the non-movant to show that there is a genuine issue for trial. Sylvia Dev. Corp. v. Calvert County, Md., 48 F.3d 810, 817 (4th Cir.1995). For purposes of summary judgment, the evidence must be viewed in a light most favorable to the non-movant. A Fisherman's Best v. Recreational Fishing Alliance, 310 F.3d 183,. 190 (4th Cir.2002). Additionally, any permissible inferences from the underlying facts must be drawn in the light most favorable to the non-moving party. Sylvia Dev. Corp., supra. A party opposing a motion for summary judgment "may not rest upon the mere allegations or denials of the . . . pleading[s], but [must] . . ., by affidavits or as otherwise provided in [Rule 56], . . . set forth specific facts showing that there is a genuine issue for trial." Fed.R.Civ.P. 56. "Summary judgment should be granted against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case and on which the party bears the burden of proof at trial." Smith v. Blackledge, 451 F.2d 1201, 1202 (4th Cir.1971).
On June 23, 2005, this Court entered an Order establishing a schedule for motions regarding summary judgment. Order, filed June 23, 2005. Pursuant to this Order, Clark was given 45 days to file a motion for summary judgment, Volvo was given 45 days from the filing of Clark's motion to file a response thereto as well as any cross-motion for summary judgment, and Clark was given 30 days to file a response to any cross-motion by Volvo. Id., at 2. The parties were further directed that no brief was to "exceed 20 pages in length, double-spaced, using a font no smaller than 12." Id. However, Volvo ignored the Order and filed a reply memorandum in support of its cross-motion for summary judgment.1 The Court's Order limiting the parties' filings was exceedingly clear; therefore, Clark's motion to strike Volvo's reply memorandum is granted and such is stricken from the record.
The Fourth Circuit directed this Court to consider Clark's claim that Volvo terminated the Agreement without "good cause" pursuant to § 4-72-204(a) of the AFPA. Volvo Constr., supra. However, Volvo argues that the Court should address initially whether the Act applies to Clark, contending that there was no "franchise" under the Act then in effect at the time the Agreement was entered. See Volvo's Opposition to Clark's Motion for Summary Judgment and Memorandum in Support of Cross-Motion for Summary Judgment ("Volvo's Opposition"), filed September 23, 2005, at 16-19. Clark argues that the Court must also consider its additional asserted grounds for recovery under the Act for failure to provide proper notification of termination under § 4-72-204(b) of the AFPA and for Volvo's alleged conduct of "omit[ting] to state a material fact" under § 4-72-207(a)(2) of the Act. See Clark's Memorandum in Support of Motion for Summary Judgment ("Clark's Memorandum"), filed August 8, 2005, at...
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