Moto-Sports, Inc. v. Gulf States Toyota, Inc.

324 F. Supp. 653, 1971 U.S. Dist. LEXIS 14761, 1971 Trade Cas. (CCH) 73,615
CourtDistrict Court, S.D. Texas
DecidedFebruary 4, 1971
DocketCiv. A. No. 70-H-693
StatusPublished
Cited by2 cases

This text of 324 F. Supp. 653 (Moto-Sports, Inc. v. Gulf States Toyota, Inc.) is published on Counsel Stack Legal Research, covering District Court, S.D. Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Moto-Sports, Inc. v. Gulf States Toyota, Inc., 324 F. Supp. 653, 1971 U.S. Dist. LEXIS 14761, 1971 Trade Cas. (CCH) 73,615 (S.D. Tex. 1971).

Opinion

MEMORANDUM AND ORDER

BUE, District Judge.

Plaintiff has sued Gulf States Toyota, Inc. [hereinafter called GST], Toyota Motor Sales, U.S.A., Inc. [hereinafter called TMS] and Toyota Motor Distributor, Inc. [hereinafter called TMD]. Plaintiff sues for violation of the Automobile Dealers’ Day in Court Act, 15 U. S.C. §§ 1221-1225, the Sherman AntiTrust Act, 15 U.S.C. § 1-7, and the Clayton Act, 15 U.S.C. § 12-27.

Plaintiff is a multiple-line automobile dealer, and at its River Oaks location, Fiats, BMC Corp. Automobiles, Volvos, and Toyotas are sold. Plaintiff has sold Toyota automobiles since September of 1966, which automobiles were imported into the United States by TMS and, until February 28, 1970, were distributed [655]*655by its wholly-owned subsidiary, TMD. All franchises that plaintiff has had for a Toyota dealership have been with TMD. The last such franchise held by plaintiff expired automatically by its express terms on February 28,1970.

In June of 1969, TMS appointed GST to replace its subsidiary as distributor of Toyota automobiles in the southwest region of the United States, including Texas. After many conferences and negotiations with plaintiff, GST, a wholly independent company, made the decision not to extend the offer of a new franchise agreement to plaintiff. Plaintiff alleges that this termination of its dealership agreement was caused by coercion and intimidation of plaintiff by GST, and was due to the fact that plaintiff would not agree to become a single line dealer of Toyota vehicles. Plaintiff alleges further that these actions breached the conditions of the franchise agreement and violated the Automobile Dealers’ Day in Court Act, 15 U.S.C. § 1222, in that GST failed to act in good faith by its termination or failure to renew the franchise previously held by plaintiff.

Defendant GST alleges that it acted in good faith in denying plaintiff a new franchise agreement, and that all requests for changes in plaintiff’s present operations were directed to bringing plaintiff up to the minimum standards for Toyota dealers as published in Toyota’s National Dealer Standards Manual.1 To this end, GST contends that it had the right to require plaintiff to become a single line dealer, and to withhold a new franchise agreement from plaintiff upon his failure to meet minimum standards.2

Defendants TMS and TMD contend that they exercise no control over GST, a wholly independent company, and have had nothing whatsoever to do with the refusal of GST to enter into a new franchise agreement with plaintiff. Further, they allege that they had no knowledge of the refusal or of the reasons therefor until after the refusal had occurred. These defendants further state that, until the time of the filing of this lawsuit, plaintiff never contacted or complained to either TMS or TMD.3 Defendants TMS and TMD now seek summary judgment concurrently with plaintiff’s efforts to obtain injunctive relief.

This case is initially on the motion docket of this Court on plaintiff’s motion for preliminary injunction, requesting the Court to require GST to supply plaintiff with automobiles and parts pending final resolution of this case. An oral hearing on the preliminary injunction has been requested. It should be noted that plaintiff ultimately seeks only money damages, and has not requested relief by way of permanent injunction.

While injunctive relief is not available under the Automobile Dealers’ Act, some courts have granted injunctions in cases similar to this, ruling that equitable relief is not cut off by the Act. The majority of those cases, however, granted injunctive relief either (1) in cases where the previous franchise agreement had not yet expired,4 or (2) in cases where the automobile dealer was a sin[656]*656gle-Iine dealer, and irreparable damage would have occurred.5

A majority of cases disallow injunctive relief for various reasons: (1) that money damages, while difficult to ascertain, are calculable and are proper and adequate relief;6 (2) that to grant injunctive relief would be to decree specific performance of an agreement not of the type which is traditionally specifically enforceable;7 and (3) that an injunction imposes an impossible task of supervising continuous performance.8

In Autowest, Inc. v. Peugeot, Inc., 287 F.Supp. 718 (E.D.N.Y.1966), a preliminary injunction was denied where the franchise agreement involved had terminated by its expressed terms prior to the time lawsuit was filed. The court reasoned that an injunction would not preserve the status quo, but would instead define a new contract. And in Miller Plymouth Center, Inc. v. Chrysler Motors Corp., 286 F.Supp. 529 (D.C.Mass.1968) Motion for Preliminary Injunction was similarly denied. There, the court reasoned that injunctive relief would, in effect, amount to a decree of specific performance of the agreement, and that this agreement was not of the type which was traditionally specifically enforceable. Further, the Miller court found that an adequate remedy was available to plaintiff by way of damages. See also Sam Goldfarb Plymouth, Inc. v. Chrysler Corp., 214 F.Supp. 600 (E.D.Mich.1962); Community Chevrolet, Inc. v. General Motors Corp., 248 F.Supp. 390 (D.C.Mass.1965).

In ruling on the propriety of granting a preliminary injunction in a case of this type, the court must consider whether the status quo would effectively be preserved by the granting of an injunction, and whether irreparable harm will result if injunctive relief is denied. The court must also consider plaintiff’s likelihood for ultimate success in this suit; that is, here, whether plaintiff can show lack of good faith per se by the defendant in which coercion, intimidation or threats were determining factors in the failure to renew the franchise agreement. 15 U.S.C. § 1221(e); Globe Motors, Inc. v. Studebaker-Packard Corp., 328 F.2d 645, 646 (3d Cir. 1964).

After having studied the pleadings, briefs and depositions on file in this action, I find that the granting of an injunction would not maintain the status quo. Plaintiff’s Toyota franchise was terminated in February of 1970. It was not until four months later, in July, 1970, that plaintiff filed suit, and five months more elapsed before injunctive relief was requested. Certainly there is little reason to grant an injunction in an effort to reinstate a dealership that has been defunct for almost a year. Moreover, plaintiff’s long delay in seeking injunctive relief serves to strengthen this Court’s belief that no irreparable injuries have been sustained by plaintiff. After termination of the Toyota franchise, plaintiff continued its operation, selling its other already established line of imported automobiles, and obtained a new replacement franchise.

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Bluebook (online)
324 F. Supp. 653, 1971 U.S. Dist. LEXIS 14761, 1971 Trade Cas. (CCH) 73,615, Counsel Stack Legal Research, https://law.counselstack.com/opinion/moto-sports-inc-v-gulf-states-toyota-inc-txsd-1971.