Colonial Dodge, Inc. v. Chrysler Corp.

11 F. Supp. 2d 737, 1996 U.S. Dist. LEXIS 22087, 1996 WL 944242
CourtDistrict Court, D. Maryland
DecidedDecember 2, 1996
DocketCiv.A. CCB-95-562
StatusPublished
Cited by15 cases

This text of 11 F. Supp. 2d 737 (Colonial Dodge, Inc. v. Chrysler Corp.) is published on Counsel Stack Legal Research, covering District Court, D. Maryland primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Colonial Dodge, Inc. v. Chrysler Corp., 11 F. Supp. 2d 737, 1996 U.S. Dist. LEXIS 22087, 1996 WL 944242 (D. Md. 1996).

Opinion

MEMORANDUM

BLAKE, District Judge.

In February 1995, Colonial Dodge, Inc. (“Colonial”), Lakeforest Chrysler Plymouth (“Lakeforest”), Wheaton Dodge City, Inc. (“Wheaton”), and Fitzgerald Auto Mall, Inc. (“Fitzgerald Dodge”) (collectively, “Dealers”), filed a seven count complaint against Chrysler Corporation (“Chrysler”) in this court. The plaintiffs alleged violations of the Automobile Dealers’ Day in Court Act, 15 U.S.C. § 1221 et seq. (“ADDCA”), § 15-207 of the Maryland Transportation Code (“State Act”), § 15-208 of the Maryland Transportation Code, as well as tortious interference with contract, tortious interference with business relations, breach of contract, and breach of the covenant of good faith by violation of Maryland Commercial Law I Code §§ 1-203 & 2 — 103(l)(b). In a supplemental complaint filed on July 17,1995, the plaintiffs based their prayer for damages on four allegations: that Chrysler coerced the plaintiffs into accepting hard-to-sell automobiles as a precondition to receiving excess fast-selling automobiles; that Chrysler coerced Lakefor-est into constructing a new showroom; that Chrysler attempted to coerce and intimidate the plaintiffs into dropping their opposition to Chrysler’s plan to place a Dodge franchise in Germantown, Maryland; and that Chrysler acted in a coercive manner by subjecting Lakeforest to unreasonable conditions in the receipt of warranty payments.

Now pending are two summary judgment motions filed by Chrysler. 1 Chrysler argues in its first motion that the plaintiffs’ inability to, prove coercion renders invalid counts one and two under the ADDCA and the State Act. Chrysler then argues in its second motion that summary judgment should be granted on all counts because the plaintiffs cannot prove they ever ordered the specific vehicles they now claim were wrongfully withheld, a necessary element of malallocation. A hearing was held on September 9, 1996, following which this' Court reserved judgment. By separate Order this Court will grant both motions and enter summary judgment on all counts.

BACKGROUND

Dealers sell, lease, and service motor vehicles manufactured by the defendant, Chrysler Corporation. (John J. Fitzgerald Aff., Pl.’s Opp’n to Absence of Coercion, Exhibit C ¶ 6.) The plaintiffs are owned and controlled by a holding company, JJF Management Services, Inc. (“JJF”), whose principal owner is John J. Fitzgerald. (Id. ¶¶3,4.) It is undisputed that each plaintiff is an “automobile dealer” as defined by 15 U.S.C. § 1221(c) (1982), and the defendant is an “automobile manufacturer” as defined by 15 U.S.C. § 1221(a) (1982). It is also undisputed that each plaintiff is a party to a written dealer agreement (“Dealer Agreement”) with Chrysler within the meaning of the ADDCA and the Maryland Dealers’ Act. Pursuant to these agreements, Chrysler agreed to provide and Dealers agreed to offer for sale certain vehicles pursuant to Chrysler’s allocation system.

James W. Cash, Vice President of JJF, and Eyal Toueg, Lakeforest General Sales Manager, provide the basis for the plaintiffs’ malallocation claim. Mr. Cash states in an-affidavit that during the period 1986 to 1994, *740 consumers’ demand for Dodge Caravans often out paced the plaintiffs’ supply. (James W. Cash Aff., PL’s Opp’n to Absence of Coercion, Exhibit A ¶¶ 9, 10.) During such periods of high demand, Mr. Cash and Ms. Toueg often approached the Chrysler District Manager for Caravans in addition to those already due to and received by the plaintiffs under Chrysler’s allocation system. (Cash Aff. ¶ 10; Toueg Aff., PL’s Opp’n to Absence of Coercion, Exhibit B ¶ 7.) Chrysler District Managers rejected these requests, explaining that “Caravan allocations were based solely on the ‘turn and earn’ method — the more a dealership sells, the more a dealership gets.” (Cash Aff. ¶ 11; see also Toueg Aff. ¶ 8.) Chrysler, in other words, was unwilling to provide Caravans outside of its predetermined allocation formula. According to both Mr. Cash and Ms. Toueg, however, Chrysler District Managers repeatedly offered to provide additional Caravans if the plaintiffs would also accept additional hard-to-sell models. (Cash Aff. ¶ 12; Toueg Aff. ¶ 8.) Mr. Cash and Ms. Toueg “[o]n many occasions ... agreed to cooperate ... and accepted the undesirable models in order to get additional Caravans.” (Cash Aff. ¶ 13; see Toueg Aff. ¶ 10.) Had he not acceded to these requests, Mr. Cash asserts that Caravan availability would have further eroded due to his inability to “turn and earn” more Caravans. (Cash Aff. ¶¶ 13, 14.) This would have led to lower profits and a potential loss of salespeople to more profitable enterprises. (Id.)

In 1990, Lakeforest initiated a plan to construct a new facility for its Chrysler dealership. Since 1978, the Lakeforest facility on Route 355 had housed Fitzgerald’s Lakefor-est Chrysler Plymouth, Inc. and Fitzgerald’s Lakeforest Oldsmobile, Inc. Sometime prior to 1990, Mr. Fitzgerald and JJF made plans to add a Toyota dealership to the Lakeforest facility. The defendant objected to this plan because of its unwillingness to share a showroom with another make of automobile.

Mr. Fitzgerald, the President of JJF, provides the plaintiffs’ sole evidence of coercion regarding construction of the Lakeforest additional facility. Mr. Fitzgerald states in an affidavit that he received a telephone call from Dave Winton, Vice President of Chrysler Credit in early 1990. (Fitzgerald Aff., PL’s Opp’n to Absence of Coercion, Exhibit C ¶ 8.) Mr. Winton allegedly related that Van Gray, the Chrysler Zone Manager, “appeared determined” to terminate Chrysler’s sales and service agreements with Lakeforest because of “dualing.” (Id. ¶ 9.) Mr. Winton allegedly stated that Mr. Fitzgerald “should be extremely careful with how [Fitzgerald] was adding the Toyota franchise in Gaithers-burg.” (Id.) After- this conversation, Mr. Fitzgerald and Mr. Jenkins, Executive Vice President of JJF, decided that to avoid termination they should build a new Chrysler showroom on Russell Avenue. (Fitzgerald Aff., Pi’s Opp’n to Absence of Coercion, Exhibit C ¶ 10; Jenkins Aff., PL’s Opp’n to Absence of Coercion, Exhibit D ¶ 10.) Prior to the conversation with Mr. Winton, Mr. Fitzgerald and Mr. Jenkins contend that they had never considered spending any money to construct an additional showroom to sell Chrysler automobiles. (Fitzgerald Aff. ¶ 10; Jenkins Aff. ¶ 10.) Mr. Fitzgerald maintains that he built the Russell Avenue facility out of fear of being terminated by Chrysler. (Fitzgerald Aff. ¶ 11.)

Chrysler counters that it in fact opposed the construction of Lakeforest’s new facility. In contrast with his affidavit, Mr. Fitzgerald’s deposition testimony corroborates Chrysler’s version at length. (See, e.g.,

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11 F. Supp. 2d 737, 1996 U.S. Dist. LEXIS 22087, 1996 WL 944242, Counsel Stack Legal Research, https://law.counselstack.com/opinion/colonial-dodge-inc-v-chrysler-corp-mdd-1996.