Crivelli v. General Motors Corp.

40 F. Supp. 2d 639, 1999 U.S. Dist. LEXIS 489, 1999 WL 26915
CourtDistrict Court, W.D. Pennsylvania
DecidedJanuary 20, 1999
DocketNo. CIV. A. 94-1453
StatusPublished

This text of 40 F. Supp. 2d 639 (Crivelli v. General Motors Corp.) is published on Counsel Stack Legal Research, covering District Court, W.D. Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Crivelli v. General Motors Corp., 40 F. Supp. 2d 639, 1999 U.S. Dist. LEXIS 489, 1999 WL 26915 (W.D. Pa. 1999).

Opinion

OPINION

ZIEGLER, Chief Judge.

I. STATEMENT OF FACTS

Pending before the court is the motion of defendant, General Motors Corporation (hereafter General Motors or GM), for judgment as a matter of law, a new trial, or remittitur. The motion will be denied for the reasons that follow.

In this diversity action in which Pennsylvania law is controlling, the jury found that General Motors violated the Pennsylvania Board of Vehicles Act, by unreasonably withholding consent to the sale of an automobile dealership, and intentionally interfered with a buy-sell agreement between Paul Scheidmantel and plaintiffs. The jury awarded plaintiffs the sum of $8.5 million in money damages.

Viewing the evidence in the light most favorable to the verdict winner, as we must, the evidence established the following. In 1991, Paul Scheidmantel decided to sell an Oldsmobile-Cadillac automobile dealership in Beaver falls, Pennsylvania, due to financial problems. Scheidmantel executed a buy-sell agreement with Floyd McElwain. The agreement contemplated that the dealership would remain in Beaver Falls and operate as a combined Oldsmobile-Cadillac dealership.

The agreement was submitted to the zone office of Oldsmobile for approval, and the zone office recommended approval to corporate headquarters in Michigan. The “Dealer Sales and Service Agreement” between General Motors and its dealers requires a dealer, such as Scheidmantel, to submit a change of ownership agreement to General Motors for approval. See, Art. 12.2-12.2.6. The Dealer Sales and Service Agreement also provides that:

If Dealer submits a proposal for a change of ownership under Article 12.2., Division will have right of first refusal to purchase the dealership assets regardless of whether the proposed buyer is qualified to be a dealer....

Art 12.3. While approval of the buy-sell agreement was pending at corporate headquarters, McElwain rescinded the agreement due to concern that Scheidmantel could not satisfy his creditors at the time of closing.

In June 1991, Nicholas Crivelli approached Scheidmantel with respect to the dealership. However, preliminary discussions never matured due to Scheidmantel’s negotiations with McElwain which ultimately led to a buy-sell agreement. When McElwain rescinded the agreement, Sche-idmantel agreed to sell the dealership to Crivelli and the parties executed a buy-sell agreement on November 20,1991.

The agreement provided that the dealership would remain a combined Olds-Cad-illac franchise but would be moved seven miles to Vanport, Pennsylvania, where Crivelli operated a Chevrolet dealership. Crivelli had been a successful GM dealer at various locations including Vanport for over 20 years.

The Scheidmantel-Crivelli buy-sell agreement was submitted to the Oldsmobile zone office, and the zone office recommended to headquarters that the sale should be rejected because Crivelli planned to move the dealership from Beaver Falls. According to the zone office, rejection could be accomplished by exercising GM’s right of first refusal as provided by Article 12.3 of the Dealer Sales and Service Agreement.

Before notifying Crivelli of any decision, the Oldsmobile zone office approached McElwain in an attempt to convince him to buy the dealership and keep it in Beaver Falls. The zone office also provided McElwain with a copy of the Scheidman-tel-Crivelli buy-sell agreement, and thus McElwain knew the price that Crivelli was willing to pay, as well as the other terms and conditions of the agreement. McEl-wain was told that, if he agreed to buy the [642]*642dealership, GM would exercise its right of first refusal and assign the franchise to McElwain. McElwain and Oldsmobile then executed an assignment and assumption agreement “if Oldsmobile and Cadillac exercise their right of first refusal.”

Without knowledge of these facts, Criv-elli executed a second agreement with Scheidmantel and notified GM that, after further investigation and study, he was willing to maintain and operate the dealership in Beaver Falls. The notice was mailed to GM on January 31, 1992. On February 6, 1992, General Motors notified Scheidmantel and Crivelli that the company was exercising its right of first refusal, and would permit McElwain to assume GM’s right and duties.

The debacle was further compounded by the response of the creditors. After waiting months without payment, the creditors forced Scheidmantel Oldsmobile-Cadillac, Inc. into bankruptcy on March 20, 1992. The Bankruptcy Court conducted a hearing on the debtor’s emergency motion for approval of the sale to McElwain on April 23, 1992. Crivelli submitted a bid to purchase the Cadillac franchise alone because he believed that Oldsmobile would reject him as a dealer based upon the prior dealings between the parties. Leroy Friend bid for the Oldsmobile franchise. Their combined bids exceeded the bid of Floyd McElwain. The Bankruptcy Court approved the sale of the dealership to McEl-wain based upon the representation to the court that General Motors preferred McElwain as a dealer.

II. JUDGMENT NOV

General Motors contends that we must enter judgment under Fed.R.Civ.P. 50(b) because, as a matter of law, the company did not violate Section 9(b)(3) of the Board of Vehicles Act, and did not intentionally and improperly interfere with the buy-sell agreement between Scheidmantel and plaintiffs.

Section 9(b)(3) of the Act provides that it is a violation of Pennsylvania law for any manufacturer to:

Unreasonably withhold consent to the sale, transfer or exchange of the franchise to a qualified buyer capable of being licensed as a new vehicle dealer in this Commonwealth.

63 P.S. § 818.9. GM concedes that Nicholas Crivelli is a “qualified buyer capable of being licensed,” but urges that judgment must be entered because General Motors had a pre-existing contractual right to refuse to approve the sale to plaintiffs based on Articles 12.2-12.3 of the Dealer Sales and Service Agreement, and the decision to reject plaintiffs and exercise its right of first refusal was not unreasonably withheld consent, as a matter of law. Further, GM’s decision to exercise a pre-existing contractual right was “proper, privileged and not actionable.” Motion of General Motors at ¶ 2(c).

We begin by noting that there is no merit to GM’s contention that plaintiffs lack standing. Motion of General Motors at ¶ 2(g). As we concluded in denying summary judgment and we repeat here, the Court of Appeals has specifically rejected the contention that the Pennsylvania Board of Vehicles Act does not reach prospective purchasers and franchisees such as plaintiffs. See, Big Apple BMW, Inc. v. BMW of North America, Inc., 974 F.2d 1358, 1383-1384 (3d Cir.1992), cert. denied, 507 U.S. 912, 113 S.Ct. 1262, 122 L.Ed.2d 659 (1993).

We also believe that there is sufficient credible evidence of record to support the findings of the jury in answer to the special interrogatories. There is no dispute that Nicholas Crivelli was a qualified buyer because he has operated several successful GM dealerships in Western Pennsylvania.

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In Re Headquarters Dodge, Inc.
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Bluebook (online)
40 F. Supp. 2d 639, 1999 U.S. Dist. LEXIS 489, 1999 WL 26915, Counsel Stack Legal Research, https://law.counselstack.com/opinion/crivelli-v-general-motors-corp-pawd-1999.