Franklin Tractor Sales v. New Holland North America, Inc.

106 F. App'x 342
CourtCourt of Appeals for the Sixth Circuit
DecidedAugust 5, 2004
DocketNo. 03-3520
StatusPublished
Cited by8 cases

This text of 106 F. App'x 342 (Franklin Tractor Sales v. New Holland North America, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Sixth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Franklin Tractor Sales v. New Holland North America, Inc., 106 F. App'x 342 (6th Cir. 2004).

Opinion

QUIST, District Judge.

Plaintiff-Appellant in this diversity action, Franklin Tractor Sales (“Franklin Tractor”), brought a claim for tortious interference with a business relationship against DefendantnAppellee, New Holland North America, Inc. (“New Holland”). The district court granted summary judgment for New Holland. Franklin Tractor appeals. For the reasons stated below, we affirm the district court’s ruling.

FACTS

New Holland is a manufacturer of construction equipment. Under a series of agreements with New Holland, Franklin Tractor was for many years a dealer of New Holland’s equipment. For several years, NationsRent and its predecessors purchased equipment made by New Holland from Franklin Tractor.

On May 28, 1999, New Holland announced a new national accounts program whereby it would begin selling its equipment directly to certain customers, including NationsRent. The program also provided that customers would designate a “delivering dealer” to which New Holland would pay a commission for each sale. Under this system, New Holland began selling equipment directly to NationsRent beginning June 1, 1999. Franklin Tractor received a commission on each sale as a designated “delivering dealer” but alleges that it would have received more sales and more money if the national accounts program had not been instituted.

On August 11, 2000, New Holland issued a memorandum entitled “National Account Procedure Change.” Under the change, a company called Keene Transport began performing all dealer preparation and delivery of equipment to New Holland’s national accounts, including NationsRent. New Holland says it instituted the proce[344]*344dure change to standardize the delivery process for all national accounts, to consolidate tracking of inventory and storage, and to standardize pre-delivery and other charges. After the procedure change, New Holland no longer paid Franklin Tractor commissions for equipment New Holland sold to NationsRent. This action followed.

STANDARD OF REVIEW

We review de novo a district court’s award of summary judgment. Copeland v. Machulis, 57 F.3d 476, 478 (6th Cir.1995) (per curiam). Summary judgment should be granted when “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). In determining whether a genuine issue of material fact exists, we must view the facts contained in the record, and all inferences that can be drawn from those facts, in the light most favorable to the non-moving party. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 1357, 89 L.Ed.2d 538 (1986).

DISCUSSION

Franklin Tractor’s claim against New Holland is for tortious interference with a business relationship. “Under Ohio law, a cause of action for [tortious interference with business relations] is made out when’ ... one who, without a privilege to do so, induces or otherwise purposely causes a third party not to enter into, or continue, a business relationship with another, or perform a contract with another____” Wright v. MetroHealth Med. Ctr., 58 F.3d 1130, 1138 (6th Cir.1995) (quoting Smith v. Klein, 23 Ohio App.3d 146, 148 n. 1, 492 N.E.2d 852, 855 n. 1 (1985)). See also Super Sulky, Inc. v. U.S. Trotting Ass’n, 174 F.3d 733, 741 (6th Cir.1999) (“‘The torts of interference with business relationships and contract rights generally occur when a person, without a privilege to do so, induces or otherwise causes a third person not to enter into or continue a business relation with another, or not to perform a contract with another.’ ”) (quoting A & B-Abell Elevator Co., Inc. v. Columbus/Central Ohio Bldg. & Constr. Trades Council, 73 Ohio St.3d 1, 14, 651 N.E.2d 1283, 1294 (1995)).1

“One of the key elements in a tortious interference claim is the question of whether a defendant’s actions were privileged.” Super Sulky, 174 F.3d at 742. In deciding whether conduct was privileged, or instead constituted “improper interference” under Ohio law, this court has applied the factors contained in the eom-[345]*345ments to § 767 of the Restatement (Second) of Torts and recounted in Kand Medical v. Freund Medical Products, 963 F.2d 125, 128 (6th Cir.1992). See Super Sulky, 174 F.3d at 742. These factors are: (1) the nature of the actor’s conduct; (2) the actor’s motive; (3) the interests of the other with which the actor’s conduct interferes; (4) the interests sought to be advanced by the actor; (5) the proximity or remoteness of the actor’s conduct to the interference; (6) the social interests in protecting the freedom of contract and the interference with such; and (7) the relations between the parties. Kand, 963 F.2d at 128. Ohio law imposes the burden of proving “lack of privilege” or “improper interference” on the plaintiff. Super Sulky, 174 F.3d at 742; Doyle v. Fairfield Mach. Co., 120 Ohio App.3d 192, 217, 697 N.E.2d 667, 683 (1997). The nature of the actor’s conduct is the chief factor that the court must consider. Super Sulky, 174 F.3d at 742; Restatement (Second) of Torts § 767, cmt. c.

The court below determined that New Holland’s conduct was privileged. First, the district court emphasized the testimony of NationsRent’s president and CEO that New Holland’s national accounts program and procedure change came about in response to NationsRent’s expressed desire to implement a direct purchase program.2 Next, the district court addressed the seven Kand factors in turn, stating:

As for the first and most important factor, the above facts demonstrate that defendant’s conduct in instituting direct sales was in response to NationsRent’s stated interest in a strategy of direct purchase coupled with coop-advertising. As for the second factor, the current record suggests nothing more than that defendant adopted the direct sales program in order to protect its position with NationsRent. Under the third factor, the interest of plaintiff was to continue as a dealer for purposes of selling defendant’s equipment to NationsRent. The fourth factor recognizes defendant’s interest in responding to the stated needs of NationsRent, and in maximizing its own economic benefits. As for the fifth factor, the proximity of defendant’s conduct to the purported interference is close, however, it is coupled with Nati-onsRent’s corresponding conduct in pursuit of a direct purchasing arrangement.

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