Bostick Oil Co. v. Michelin Tire Corp.

478 F. Supp. 68, 1979 U.S. Dist. LEXIS 9015
CourtDistrict Court, D. South Carolina
DecidedOctober 23, 1979
DocketCiv. A. No. 78-837
StatusPublished

This text of 478 F. Supp. 68 (Bostick Oil Co. v. Michelin Tire Corp.) is published on Counsel Stack Legal Research, covering District Court, D. South Carolina primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Bostick Oil Co. v. Michelin Tire Corp., 478 F. Supp. 68, 1979 U.S. Dist. LEXIS 9015 (D.S.C. 1979).

Opinion

ORDER ON MOTION FOR SUMMARY JUDGMENT ON COUNTERCLAIM

HEMPHILL, District Judge.

This matter is before the court on plaintiff’s motion for summary judgment as to defendant’s counterclaim for abuse of process. Plaintiff filed this action under 28 U.S.C. § 13371 and under 28 U.S.C. § 1332 2 alleging certain antitrust violations and common law wrongs. Defendant then counterclaimed on grounds that the original action was brought for the ulterior purpose of forcing defendant to continue in a business relation with plaintiff which had lapsed and had not been renewed, and to delay for a period of years the payment of monies due on the lapsed contract. The parties have briefed this court on the motion for summary judgment as to the abuse of process counterclaim, and have filed transcripts of the hearings for a temporary restraining order and temporary injunction. The court having reviewed these materials and the applicable cases, is of the opinion that material issues of fact remain in dispute which require this court to deny plaintiff’s motion.

This court has recognized that a cause of action for abuse of process exists in South Carolina. Ransome v. Mimms, 320 F.Supp. 1110 (D.S.C.1971). The essential elements of abuse of process are:

[Fjirst, an ulterior purpose and second, a willful act in the use of the process not proper in the regular conduct in the proceeding. Some definite act or threat not authorized by the process or aimed at an objective not legitimate in the use of the process, is required; and there is no liability where the defendant has done nothing more than carry out the process to its authorized conclusion, even though with bad intentions. The improper purpose takes the form of coercion to obtain a collateral advantage, not properly involved in the proceeding itself, such as the surrender of property or the payment [70]*70of money, by the use of process as a threat or club. There is, in other words, a form of extortion, and it is what is done in the course of negotiation, rather than the issuance of any formal use of the process itself which constitutes the tort.

Huggins v. Winn Dixie Greenville, 249 S.C. 206, 153 S.E.2d 693 (1967), quoting Prosser, Handbook of the Law of Torts, 2d edition, pp. 668-669. The mere commencement of an action by the service of a Summons as required by law cannot amount to abuse of process. Bell Lines, Inc. v. Strickland, 254 S.C. 148, 173 S.E.2d 788 (1970).

Defendant’s counterclaim asserts in paragraph 6:

The act of the plaintiff in instituting this legal action, and its failure to pay its debt owing to the defendant when instituting this legal action, and its failure to pay the costs and expenses incurred by the defendant in collecting the debt manifests a malicious abuse of legal process to accomplish improper results, that is, to coerce and compel the defendant to continue to deal with the plaintiff irrespective of contractual rights, and to avoid the payment of legitimate debts, costs and expenses.

The events which gave rise to this claim occurred in two hearings before this court, one in a hearing to continue a temporary restraining order, and the other being a hearing to dissolve the TRO. The background facts are undisputed, only their meaning is in question. For a number of years the parties entered into an annual contract which provided that it would expire after one year. The first contract, called a Dealer Sales Agreement, was entered into in May 1974, and a renewal of that contract, requiring separate documents, was entered into each year up until May 1978. Each of these contracts provided that it would terminate, unless renewed, after one year. Over the years plaintiff had developed a substantial credit line with defendant and in May 1978 plaintiff owed defendant several hundreds of thousands of dollars for purchases of tires from defendant. In May, 1978, defendant declined to renew plaintiff’s agreement relating to the sale of truck tires, but expressed an initial willingness to enter into an agreement so that plaintiff could continue selling passenger tires. At this point, plaintiff filed the instant lawsuit.

At the time the action was instituted, a motion, in proper form with supporting affidavit, was made for a temporary restraining order which was subsequently issued by this court on May 26, 1978. The TRO restrained defendant from terminating the Dealer Sales Agreement until a hearing on plaintiff’s motion for a preliminary injunction. Bond was set at $1,000 because this court was unsure of the potential damages to defendant but felt that defendant could not suffer substantial damages in the 10 days before a hearing on the preliminary injunction.

At the June 1st hearing on the preliminary injunction this court directed plaintiff to continue making payments on its account to defendant, and instructed plaintiff to pay cash on delivery for tires received after that date. In addition the cash bond was increased. These modifications permitted defendant ample time within which to prepare its response to the action while the court refrained from creating a new contract for the parties who were no longer bound under the expired agreement. The modifications were granted over plaintiff’s objection. This court issued its Order on June 2,1978 continuing the Restraining Order as modified.

On June 2, 1978, plaintiff filed its motion to dissolve the Restraining Order based on plaintiff’s inability to continue transacting business with defendant under the terms of the modifications contained in the June 2, 1978 Order. On June 14 this court dissolved the Restraining Order as to the COD payments for tires (with certain minor exceptions) but continued the provisions regarding payment on the line of credit extended by defendant to plaintiff.

The theory behind defendant’s counterclaim is that these hearings were used by plaintiff in an attempt to force defendant to continue in business with plaintiff on plaintiff’s terms while allowing plaintiff the [71]*71interest on and use of, the $500,000 line of credit until this lawsuit is concluded. Defendant contends that under Rule 13(a)3 it must counterclaim for the $500,000 in extended credit or forfeit its right to sue, which allows plaintiff to take the position that payment of the $500,000 should be delayed until a set-off can be computed against plaintiff’s recovery on its antitrust and associated claims. Meanwhile defendant says plaintiff could reap the benefits of interest from usage of this money for the 2-3 years it might take to complete this lawsuit. This prospect constitutes in defendant’s eyes a threat or coercion to be used in forcing settlement of the case.

Plaintiff asserts that it has used the legal process in a normal manner at all times. It notes that the TRO continuing the terms of the contract then in effect on May 26, 1978, is authorized under 15 U.S.C. § 264 which permits injunctive relief for certain violations of the antitrust laws.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Bell Lines, Inc. v. Strickland
173 S.E.2d 788 (Supreme Court of South Carolina, 1970)
Huggins v. Winn-Dixie Greenville, Inc.
153 S.E.2d 693 (Supreme Court of South Carolina, 1967)
Pepp v. Superior Pontiac GMC, Inc.
412 F. Supp. 1053 (E.D. Louisiana, 1976)
Ransome v. Mimms
320 F. Supp. 1110 (D. South Carolina, 1971)

Cite This Page — Counsel Stack

Bluebook (online)
478 F. Supp. 68, 1979 U.S. Dist. LEXIS 9015, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bostick-oil-co-v-michelin-tire-corp-scd-1979.