Wright-Moore Corp. v. Ricoh Corp.

• Decision Date: 10 December 1991
• Docket Number: Civ. No. F 86-35.
• Citation: 794 F. Supp. 844
• Parties: WRIGHT-MOORE CORPORATION, Plaintiff, v. RICOH CORPORATION, Defendant.
• Court: U.S. District Court — Northern District of Indiana

794 F. Supp. 844

WRIGHT-MOORE CORPORATION, Plaintiff, v. RICOH CORPORATION, Defendant.

Civ. No. F 86-35.

United States District Court, N.D. Indiana, Fort Wayne Division.

December 10, 1991.

COPYRIGHT MATERIAL OMITTED

Philip A. Whistler, Fred R. Biesecker, Ice Miller Donadio & Ryan, Indianapolis, Ind., Vincent J. Backs, Beers, Mallers, Backs & Salin, Fort Wayne, Ind., for plaintiff.

James P. Fenton, Robert S. Walters, Barrett & McNagny, Fort Wayne, Ind., for defendant.

ORDER

WILLIAM C. LEE, District Judge.

This matter is before the court on several motions for summary judgment filed by the defendant as well as on a motion to bifurcate, also filed by the defendant. The court heard oral arguments on the motions on October 31, 1991. For the following reasons, defendant's motions for summary judgment on the franchise issues, the claim for wrongful non-renewal, the claim for breach of credit terms, and the claim for punitive damages will be granted. Defendant's motion for summary judgment on the claims for consequential and other damages and defendant's motion to bifurcate will be denied¹.

I. Factual Background and Procedural Posture

Plaintiff Wright-Moore Corporation is an Indiana corporation having a principal place of business in Fort Wayne, Indiana. Defendant Ricoh Corporation is a New York corporation with a principal place of business in West Caldwell, New Jersey. Plaintiff's complaint arises out of disagreements as to the interpretation and application of a product distribution agreement.

Plaintiff is an independent distributor of copiers, parts, and supplies. It has developed a network of independent authorized Wright-Moore dealers to purchase and resell its products. Plaintiff supports these dealers by providing service training for the products they handle, as well as offering the independent dealers favorable credit terms and minimal inventory requirements.

Defendant is a manufacturer of copiers and related parts and supplies. It distributes its products through independent distributors (such as Wright-Moore) as well as its own network of retail dealers. In late 1983, representatives of the parties discussed the possibility that Wright-Moore would become a major distributor of certain lines of copiers manufactured by Ricoh. In early 1984, the parties entered into an agreement whereby plaintiff would distribute Ricoh 3000 Series copiers. In July 1984, the parties entered into a national distributorship agreement under which plaintiff was appointed as a national distributor of Series 3000 and Series 4000 Ricoh copiers. The agreement was for a one year period. The parties also entered into a letter agreement, dated July 23, 1984. This letter agreement was sent to Ed Kane at Ricoh Corporation by Sachi Niyogi, the Controller of Wright-Moore Corporation and memorialized an oral agreement between the parties in which Wright-Moore agreed to purchase 1200 Ricoh copiers under specific terms. Ed Kane signed the bottom of the letter thereby confirming the terms set out in the letter.

Plaintiff claims that, in connection with its agreement with the defendant, it was assured that its relationship with Ricoh would be long term and that under Ricoh policy its national distributorship would be renewed as long as Wright-Moore satisfied its financial obligation to Ricoh and met its minimum purchase agreements. Plaintiff also contends that the continued success of its dealers caused dealers in Ricoh's own network to complain that Wright-Moore's aggressive pricing policy cut into their profits.

On July 27, 1989, this court entered summary judgment in favor of the defendant on plaintiff's claims of conspiracy to restrain trade in violation of the Sherman Anti-Trust Act, claims of violations of the Indiana franchise statutes, claims of breach of contract, claims of fraud and estoppel, and claims for punitive damages.

On August 28, 1990, the Seventh Circuit Court of Appeals, on appeal and cross appeal of this court's order, held that (1) Indiana franchise law applied to the case notwithstanding the New York choice of law provision in the distributorship agreement; (2) summary judgment was inappropriate as to whether Wright-Moore qualified as franchisee; (3) Ricoh's nonrenewal of the distributorship agreement for internal economic reasons, though not shown to be in bad faith, was not for good cause; and (4) summary judgment was not appropriate on one of Wright-Moore's contract claims, but was appropriate on the other contract claim and on claims of estoppel and fraud. The Court did not reach the issue of punitive damages². See Wright-Moore Corp. v. Ricoh Corp., 908 F.2d 128 (7th Cir.1990).

The Seventh Circuit remanded the case to this court for further proceedings, and after extensive discovery the defendant filed renewed summary judgment motions as well as a motion to bifurcate the franchise claims.

Summary judgment is proper "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed. R.Civ.P. 56(c). However, Rule 56(c) is not a requirement that the moving party negate his opponent's claim. Fitzpatrick v. Catholic Bishop of Chicago, 916 F.2d 1254, 1256 (7th Cir.1990). Rather, Rule 56(c) places an affirmative burden on the non-moving party and mandates the entry of summary judgment, after adequate time for discovery, against a party "who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and in which that party will bear the burden of proof at trial." Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 2552-53, 91 L.Ed.2d 265 (1986). The standard for granting summary judgment mirrors the directed verdict standard under Rule 50(a), which requires the court to grant a directed verdict where there can be but one reasonable conclusion. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505, 2511, 91 L.Ed.2d 202 (1986). A scintilla of evidence in support of the non-moving party's position is not sufficient to successfully oppose summary judgment; "there must be evidence on which the jury could reasonably find for the plaintiff." Id. 106 S.Ct. at 2512; In re Matter of Wildman, 859 F.2d 553, 557 (7th Cir.1988); Klein v. Ryan, 847 F.2d 368, 374 (7th Cir. 1988); Valentine v. Joliet Tp. High School Dist. No. 204, 802 F.2d 981, 986 (7th Cir. 1986).

Initially, Rule 56 requires the moving party to inform the court of the basis for the motion, and to identify those portions of the "pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, which demonstrate the absence of a genuine issue of material fact," Celotex, 106 S.Ct. at 2553. The non-moving party may oppose the motion with any of the evidentiary materials listed in Rule 56(c), but reliance on the pleadings alone is not sufficient to withstand summary judgment. Goka v. Bobbitt, 862 F.2d 646, 649 (7th Cir.1988); Guenin v. Sendra Corp., 700 F.Supp. 973, 974 (N.D.Ind.1988); Posey v. Skyline Corp., 702 F.2d 102, 105 (7th Cir.1983), cert. denied, 464 U.S. 960, 104 S.Ct. 392, 78 L.Ed.2d 336 (1983). In ruling on a summary judgment motion the court accepts as true the non-moving party's evidence, draws all legitimate inferences in favor of the non-moving party, and does not weigh the evidence or the credibility of witnesses. Anderson, 106 S.Ct. at 2511.

Substantive law determines which facts are material; that is, which facts might affect the outcome of the suit under the governing law. Id. at 2510. Irrelevant or unnecessary facts do not preclude summary judgment even when they are in dispute. Id. The issue of fact must be genuine. Fed.R.Civ.P. 56(c), (e). To establish a genuine issue of fact, the non-moving party "must do more than simply show that there is some metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co. v. Zenith Radio, 475 U.S. 574, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538 (1986); First National Bank of Cicero v. Lewco Securities Corp., 860 F.2d 1407, 1411 (7th Cir.1988). The non-moving party must come forward with specific facts showing that there is a genuine issue for trial. Id. A summary judgment determination is essentially an inquiry as to "whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law." Anderson, 106 S.Ct. at 2512.

II. Franchise Issues

A. Background

Throughout this litigation, Ricoh has argued that Wright-Moore is not a franchisee and, therefore, Indiana franchise law does not apply. The term "franchise" is defined in Ind.Code § 23-2-2.7-5 by referring to Ind.Code § 23-2-2.5-1(a)(1), et seq. This statute, a part of the Indiana Franchise Act, provides in part:

Sec. 1. As used in this chapter:

(a) "Franchise" means a contract by which:

(1) a franchisee is granted the right to engage in the business of dispensing goods or services, under a marketing plan or system prescribed in substantial part by a franchisor;

(2) the operation of the franchisee's business pursuant to such a plan is substantially associated with the franchisor's trademark, service mark, logotype, advertising, or other commercial symbol designating the franchisor or its affiliate; and

(3) the person granted the right to engage in this business is required to pay a franchise fee.

In this court's order of July 27, 1989, this court held that plaintiff had forwarded sufficient evidence to defeat defendant's claim that plaintiff was not a franchisee. The Seventh Circuit affirmed this holding and compared the present case with Master Abrasives Corp. v. Williams, 469 N.E.2d 1196 (Ind.App.1984). With respect to the first element of a franchise, existence of a marketing plan, the Seventh Circuit noted that there was sufficient evidence to...