Bisel v. Matco Tools

715 F. Supp. 316, 1989 U.S. Dist. LEXIS 7377, 1989 WL 73427
CourtDistrict Court, D. Kansas
DecidedJune 8, 1989
DocketCiv. A. No. 87-4329-O
StatusPublished
Cited by1 cases

This text of 715 F. Supp. 316 (Bisel v. Matco Tools) is published on Counsel Stack Legal Research, covering District Court, D. Kansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Bisel v. Matco Tools, 715 F. Supp. 316, 1989 U.S. Dist. LEXIS 7377, 1989 WL 73427 (D. Kan. 1989).

Opinion

MEMORANDUM AND ORDER

EARL E. O’CONNOR, Chief Judge.

This matter is before the court on defendant’s motion for summary judgment and plaintiff’s cross-motion for partial summary judgment on the breach of contract claim. The relevant facts, contained in the parties’ briefs, are largely undisputed and may be briefly summarized. Plaintiff is a distributor of defendant-manufacturer’s tools. Under the terms of a contract between the parties, plaintiff was appointed a “nonexclusive distributor for [an] area of primary responsibility.” Defendant’s Memorandum Brief in Support of Summary Judgment, Exhibit A. Plaintiff’s territory was a portion of Topeka, Kansas, and included the Goodyear Tire & Rubber Company (“Goodyear”) plant in that city. Over a period of several years, plaintiff solicited and obtained sales of defendant’s tools to Goodyear. For reasons not relevant to the disposition of these motions, representatives of the Topeka Goodyear plant approached defendant about purchasing tools directly, at prices lower than those available from plaintiff. Defendant agreed to such an arrangement and began selling directly to Goodyear, thereby eliminating the latter’s need for plaintiff’s services. Plaintiff brings this action alleging that defendant breached the distributorship agreement, violated the Robinson-Patman Act (15 U.S.C. §§ 13 et seq., “the Act”), and made fraudulent misrepresentations to plaintiff.

In a motion for summary judgment, the movant need not negate the allegations of the nonmoving party. However, it must demonstrate that there is no genuine issue of material fact and is therefore entitled to judgment as a matter of law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52, 106 S.Ct. 2505, 2511-12, 91 L.Ed.2d 202 (1986). This initial burden entails “informing the district court of the basis for its motion, and identifying those portions of ‘the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any,’ which it believes demonstrates the absence of a [318]*318genuine issue of material fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 2553, 91 L.Ed.2d 265 (1986) (quoting Fed.R.Civ.P. 56(c)).

When faced with a motion for summary judgment, the nonmoving party may not simply rely upon its pleadings but rather must set forth specific facts showing that there is a genuine issue for trial. Anderson, 477 U.S. at 248, 106 S.Ct. at 2510. Indeed, “the plain language of Rule 56(c) mandates the entry of summary judgment ... 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 that party will bear the burden of proof at trial.” Celotex, 477 U.S. at 322, 106 S.Ct. at 2552. The test is whether the facts, viewed in the light most favorable to the nonmoving party, are such that a court may conclude that a reasonable jury could find for the nonmoving party. Anderson, 477 U.S. at 248, 106 S.Ct. at 2510.

I. Breach of Contract1

Defendant moves for summary judgment on this claim alleging that, because plaintiff was granted only a “nonexclusive distributorship,” defendant had no obligation to refrain from selling its tools directly to Goodyear. Moreover, defendant argues, its right to do so was clearly established by the term “nonexclusive distributor,” so that it cannot be held to have violated its implied obligation of good faith and fair dealing under the contract. Plaintiff responds by moving for partial summary judgment on this claim, asserting that the term “nonexclusive distributorship” merely denoted the fact that defendant could appoint other distributors over the same territory covered by plaintiff, not that defendant itself could sell directly to customers in plaintiffs territory. Because the contract itself is silent on the question of defendant’s obligation to refrain from selling directly, plaintiff contends, the court must infer the parties’ intentions on this point from defendant’s representations to plaintiff.

The parties do not cite, and the court has been unable to discover, authority recognizing the term “nonexclusive distributor” as unambiguously conferring upon contracting parties specific rights and responsibilities. Thus, the court concludes that that term, as used in this distributorship agreement, is ambiguous. Under Ohio law, such ambiguity raises a question of fact. Inland Refuse Transfer Co. v. Browning-Ferris Indus. of Ohio, 15 Ohio St.3d 321, 474 N.E.2d 271 (1984). Neither party has presented sufficient evidence for the court to hold, as a matter of law, that either of the proffered understandings is correct.2

Plaintiff’s motion must also fail as to defendant’s alleged breach of good faith performance under the contract. That duty arises only in connection with a contractual obligation. See, e.g., Eckstein v. Cummins, 41 Ohio App.2d 1, 321 N.E.2d 897 (1974). Because we hold that the contract is unclear as to the existence of any obligation to refrain from selling directly to plaintiff’s customers, it follows that we may not find, as a matter of law, that defendant breached its duty to perform that alleged obligation in good faith. Accordingly, summary judgment on this claim is inappropriate.

II. Robinson-Patman Claim

Defendant urges summary judgment on this claim, asserting that it did not engage in “competition” with plaintiff, within the meaning of the Act. As the court noted in Conoco Inc. v. Inman Oil, Inc., 774 F.2d 895 (8th Cir.1985):

A Robinson-Patman violation consists essentially of two elements: (1) price discrimination, and (2) the requisite injury [319]*319to competition as a result. Price discrimination” within the meaning of the statute is nothing more than a difference in price between items of like grade and quality.

Id. at 901 (citations omitted).3 In the case at bar, there is no question that defendant sold identical items to Goodyear at lower prices than were available through plaintiff. The question, therefore, is whether the second element referred to in Conoco has been met. Again, that case is instructive:

To amount to a violation, the [price] discrimination must be shown to have caused the requisite injury to competition. The statute is concerned with the protection of competition on three levels: (1) competition with the seller who granted the discriminatory prices (primary line); (2) competition with the seller’s purchaser who received the favorable lower price (secondary line); and (3) competition with a customer of the favored purchaser (tertiary line).
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Bluebook (online)
715 F. Supp. 316, 1989 U.S. Dist. LEXIS 7377, 1989 WL 73427, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bisel-v-matco-tools-ksd-1989.