Water Craft Management, L.L.C. v. Mercury Marine, CIV.A. 99-1031-B-M1.
| Citation | 361 F.Supp.2d 518 |
| Decision Date | 12 August 2004 |
| Docket Number | No. CIV.A. 99-1031-B-M1.,CIV.A. 99-1031-B-M1. |
| Parties | WATER CRAFT MANAGEMENT, L.L.C., et al. v. MERCURY MARINE(a Division of Brunswick Corporation), et al. |
| Court | U.S. District Court — Middle District of Louisiana |
Andre G. Coudrain, Cashe Lewis Coudrain & Sandage, LLP, Christopher M. Moody, Moody & Moody, Hammond, LA, for Plaintiffs.
Craig Lewis Caesar, Anne Dorman LeJeune, B. Franklin Martin, III, Colvin G. Norwood, Jr., McGlinchey Stafford, PLLC, New Orleans, LA, for Defendants.
RULING
Water Craft Management, L.L.C. ("Water Craft"), Douglas Wayne Glascock ("Glascock"), and Nick Martrain, III ("Martrain") have filed this suit against Mercury Marine (A Division Of Brunswick Corporation) ("Mercury") alleging violations of federal antitrust law under 15 U.S.C. § 13(a) and various state law claims, including breach of contract, detrimental reliance, fraud, and misrepresentation claims.1 With the consent of the parties, the claims were trifurcated. The Court tried the antitrust claims and state law claims separately. A trial on the issue of damages will be held at a later date.
The antitrust claims were tried by the Court without a jury.2 After hearing the evidence in this case, considering the credibility of the witnesses who testified in person at trial, and reviewing the briefs, deposition transcripts, and other arguments presented by the parties, the Court finds that plaintiffs failed to prove all of the elements of their federal antitrust claims by a preponderance of the evidence.3 The Court further finds in the alternative, that even if plaintiffs did prove their antitrust claim, Mercury has proved as a matter of law under the facts of this case its meeting competition defense by a preponderance of the evidence which serves as a complete bar to plaintiffs' federal antitrust claims.
The state law claims were also tried before this Court without a jury.4 After hearing the evidence on this claim,5 the Court finds that: (1) plaintiffs have failed to prove all of the elements of their state law breach of contract claims by a preponderance of the evidence, and (2) plaintiffs have proven all of the elements of their state law claims based on detrimental reliance, fraud, and misrepresentation by a preponderance of the evidence. Accordingly, it is necessary for the Court to proceed with the trial of damages to determine the extent, if any, of the plaintiffs' damages sustained based on their state law detrimental reliance, fraud, and misrepresentation claims.
The state law counter-claims brought by Mercury were also tried before this Court without a jury.6 The Court finds that Mercury has proven the following claims by a preponderance of the evidence:
(1) The sum of $79,117.32 plus interest and attorneys fees against Glascock and Martrain;
(2) The sum of $11,379.75 plus interest and attorneys fees against Water Craft, Glascock and Martrain;
(3) The sum of $3,855.12 against Water Craft, Glascock and Martrain;
(4) The sum of $6,076.67 against Glascock and Martrain;
(5) The sum of $26,576.94 against Glascock
Mercury is also entitled to recover interest from the date of judgment until paid on each of these claims.
The Court now proceeds to give reasons for the Court's rulings.
This case involves transactions between the manufacturers and dealers in the boating industry. Both of the plaintiffs, Glascock and Martrain, are experienced businessmen and marine dealers. Since 1986, Glascock owned six separate marine dealerships before opening LA Boating Center ("LA Boating") which did business as the Water Craft store in Baton Rouge. These dealerships were located in various parts of Louisiana. In some of these dealerships, Glascock had business partners. Glascock owned Hammond Boating Centre in Hammond, Louisiana, which opened in 1986 and operated as a Mercury dealership carrying Mariner motors. During the time Water Craft was a going concern, Glascock continued to run his Mercury dealership in Hammond, Louisiana. Glascock also owned other Mercury dealerships which were Tracker Marine ("Tracker") dealerships. During this time, he served on the Tracker Dealer Council and had been one of its top ten dealers for ten years. Thus, Glascock had been actively and successfully involved in the marine dealership industry for approximately twelve years at the time he and Martrain opened LA Boating in January 1997. The evidence also reveals that Glascock had served on several manufacturer-dealer councils in connection with the marine products industry and was a member of several trade associations. In addition to Glascock's extensive experience in the marine product industry, Glascock owned and managed several other successful businesses and by his own admission, has become a millionaire because of his business activities and experience.
Martrain had over twenty years experience in the marine dealer industry before opening LA Boating in Baton Rouge. He also had served on numerous industry boards throughout that time, including the Advisory Council for Stratos Boat Company and the National Dealer Council for Outboard Marine Corporation ("OMC"). Before opening the Water Craft store, Martrain owned and managed a Baton Rouge OMC dealership, Martrain Marine, which opened in 1983. Martrain closed this dealership on October 31, 1996. It is clear that one of the primary reasons Martrain closed Martrain Marine was because of the extensive and robust competition in the Baton Rouge marine product marketplace. In October 1996, Martrain had agreed that he would sell his dealership's assets in Martrain Marine to Kenny Hebert ("Hebert") who owned Plaquemine Marine. It was also agreed that Hebert would lease the former Martrain Marine building from Martrain and his family.
Both Glascock and Martrain knew the Baton Rouge marine business market was highly competitive. Glascock had operated a Baton Rouge Mercury dealership carrying Mariner motors, and had closed the dealership in the early 1990's because the Baton Rouge market was too competitive. He sold that dealership to Travis Boating Center ("Travis"), which was an OMC dealer at the time. Travis would later become a very important party in this litigation.
Both Glascock and Martrain testified that because they previously had bad experiences with the Baton Rouge marine market, they had no desire to open a Baton Rouge Mercury dealership. Though the motivation is disputed, Glascock and Martrain began to discuss the possibility of the two partnering to open a Mercury dealership in Baton Rouge in September 1996. Glascock contends he was approached by David Rohrbach, a sales representative for Mercury, in 1996 to discuss the possibility of opening a Baton Rouge Mercury dealership. Rohrbach eventually signed Water Craft d/b/a LA Boating to be a Mercury dealer. Rohrbach was assigned to the Louisiana territory from approximately April 1996 until he left his employment with Mercury in May 1997. During the course of Glascock's initial discussions with Mercury, he testified that he was very negative about opening a Baton Rouge Mercury dealership. However, in later discussions, Glascock testified that the Mercury representatives said they could make the offer very attractive, and put him in contact with Martrain to discuss a joint venture. At about the same time, Martrain testified that he was approached by Rohrbach and/or Glascock to discuss the possibility of entering into a joint venture with Glascock for a Baton Rouge Mercury dealership.
During their testimony, Glascock and Martrain contended that one of the initial and primary concerns they had about going into business again in Baton Rouge was the presence of Travis in the Baton Rouge market.8 Both knew that Travis was receiving deep discounts from OMC and also knew it would be difficult for them to compete with Travis price-wise unless certain price concessions could be obtained from Mercury. Glascock and Martrain were also concerned about the number of Mercury dealers already doing business in the Baton Rouge area. Finally, Glascock and Martrain stated that they both knew about Bill Seeley and John Randolph and their method of operation, and testified they had expressed this concern to Rohrbach personally. Both Glascock and Martrain expressed a concern that both Seeley and Randolph were Mercury executives, but had previously worked for OMC and were instrumental in signing Travis as an OMC dealer. Glascock and Martrain feared that Mercury now intended to make Travis a Mercury dealer because Travis was a fast-growing multi-location dealer for OMC, and Seeley and Randolph had been responsible for signing Travis to be an OMC dealer.
Glascock and Martrain claim that Rohrbach was quick to dispel these fears. According to plaintiffs, Rohrbach expressly advised them that Mercury would be providing LA Boating with the deepest possible discounts, and they would be able to buy boat motors as cheap or cheaper than anyone in the Baton Rouge market, including Travis. In addition, Glascock and Martrain claim Rohrbach made other promises to them concerning advertising co-op money and discounts on parts and supplies. Finally, Glascock and Martrain claim that Rohrbach and other Mercury representatives assured them that Travis would never be made a Mercury dealer. Throughout both bench trials, Glascock and Martrain testified that Mercury representatives had referred to Travis as being "public enemy number one," a statement Mercury emphatically denies Rohrbach, or any of its representatives, ever made.
Glascock and Martrain also claim that Rohrbach made representations to them that Mercury planned to reduce the total number of dealerships in the Baton Rouge market, and wanted to consolidate its...
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