Rochester Ford Sales, Inc. v. Ford Motor Co.

287 F.3d 32, 2002 WL 603056
CourtCourt of Appeals for the First Circuit
DecidedApril 24, 2002
Docket01-2049
StatusPublished
Cited by95 cases

This text of 287 F.3d 32 (Rochester Ford Sales, Inc. v. Ford Motor Co.) is published on Counsel Stack Legal Research, covering Court of Appeals for the First Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Rochester Ford Sales, Inc. v. Ford Motor Co., 287 F.3d 32, 2002 WL 603056 (1st Cir. 2002).

Opinion

GERTNER, District Judge.

This ease asks us to construe the validity of a general release provision in a sales and service (i.e., dealership) agreement between an automobile manufacturer and its licensed dealer. In December 1999, plaintiff-appellant Rochester Ford Sales (“RFS”), a Ford dealership, sued defendant-appellee Ford Motor Co. (“Ford”), claiming, inter alia, that Ford’s refusal to approve another licensed dealer’s offer to purchase RFS’s assets and dealership rights in 1995 violated N.H.Rev.Stat. Ann. § 357-C:3:I (“ § 357-C”). The statute provides:

It shall be deemed an unfair method of competition and unfair and deceptive practice for any [m]anufacturer, factory branch, factory representative, distributor, distributor branch, distributor representative or motor vehicle dealer to engage in any action which is arbitrary, in bad faith, or unconscionable and which causes damage to any of such parties or to the public.

In response, Ford argued that any claims RFS may have had under § 357-C were barred by a general release RFS executed vis-á-vis Ford when it exercised certain options under Ford’s Sales and Service Agreement (“Agreement”). In 1998, Ford approved the sale of RFS’s dealership assets to Granite State Ford, LLC (“Granite Ford”). When RFS elected to have Ford repurchase certain Ford products in order to facilitate the sale, it also executed a release of all claims against Ford.

In December 2000, Ford moved for summary judgment on the release issue. The district court 1 granted Ford’s motion in June 2001. Rochester Ford Sales, Inc. v. Ford Motor Co., No. Civ. 99-559-M, 2001 WL 799594 (D.N.H. June 21, 2001). The district court found that the terms of the general release in question were both valid and binding on RFS, rejecting RFS’s arguments that the release was supported by insufficient consideration and/or that it was the product of coercion.

RFS now raises two issues on appeal: (1) the validity of the release and (2) assuming the release is not valid, whether RFS presented sufficient evidence to war *35 rant a jury trial on the § 357-C claim. We hereby AFFIRM the decision of the district court in all respects.

I. BACKGROUND

A. Factual Background

As the law requires, we construe the facts of this case in the light most favorable to RFS, the nonmoving party. Houlton Citizens’ Coalition v. Town of Houlton, 175 F.3d 178, 184 (1st Cir.1999). As the district court observed, the parties agree regarding many basic facts, although RFS would have us draw inferences from some of those facts that even the lenient summary judgment standard cannot support.

RFS first entered into a Sales and Service Agreement with Ford in 1980. After the dealer principal, James Peirce, died in 1994, his widow Meredith S. Peirce became its sole owner. In 1996, she executed a new Sales and Service Agreement with Ford, which the parties agree was identical to the first in all relevant respects. The Agreement itself is an extensive document, addressing in detail the procedures for running and selling a dealership. For the present purposes, several provisions are relevant.

First, with regard to a prospective sale of the dealership, Paragraph 24(a)(2) gives Ford the right to approve or decline to approve a prospective purchaser. It provides, in relevant part:

[Ford] has the right to approve or decline to approve any prospective purchaser as.to his character, automotive experience, management, capital and other qualifications for appointment as an authorized dealer in company products for the dealership operations involved. Approval ... of the prospective purchaser shall not, however, be unreasonably withheld.

Second, to facilitate the orderly transfer of ownership, a number of provisions address the right of the Dealer to demand the repurchase of Ford products by Ford at the time of the dealership sale and to assign such rights to the successor dealer. Paragraph 21 describes the right of the Dealer to demand that the company repurchase certain parts in connection with the Dealer’s notice of termination or nonre-newal, as follows:

Upon ... termination or nonrenewal of this agreement by the Dealer, the Dealer may demand in his notice of termination or nonrenewal, to have the Company purchase or accept upon return from the Dealer, in return for his general release specified in paragraph 23 [certain vehicles, parts, dealer’s signs, special tools and equipment as outlined in paragraphs 21(a)-(d) ].

The Dealer could not only demand Ford’s repurchase of parts, but could also assign its repurchase rights to a successor Dealer.

Assignment of Benefits. As an assist to the Dealer in effecting an orderly transfer of his assets to a replacement dealer and to minimize possible interruptions in customer convenience and service, in the event of termination or nonrenewal by either party, any rights or benefits with respect to subparagraphs 21(a), 21(b), 21(c), and 21(d), herein may be assigned by the Dealer to anyone whom the Dealer has agreed to sell the respective property and whom [Ford] has approved as a replacement for the Dealer. Such assignments will be subject to Dealer’s fulfillment of his obligations under paragraph 19 and this paragraph 21 and subject to the Dealer’s tender of a general release as specified in paragraph 23.

Both of these provisions — the Dealer’s right to have Ford repurchase parts and the Dealer’s right to assign its repurchase *36 rights to the successor dealer — required the execution of a general release between the Dealer and Ford. Paragraph 23 provides, in relevant part, as follows:

[U]pon the Dealer’s demand of any of [the benefits provided for in paragraph 21] upon any termination or nonrenewal by the Dealer, [Ford] shall be released from any and all other liability to the Dealer with respect to all relationships and actions between the Dealer and [Ford], however claimed to arise.... Simultaneously with the receipt of any benefits so elected or demanded, the Dealer shall execute and deliver to [Ford] a general release with exceptions, as above described, satisfactory to [Ford].

Negotiations to sell RFS, which was not doing well financially, began in 1994. The dealership proved to be difficult to sell because the real estate on which it was situated was a former municipal dump and contaminated by solid waste. Over the next three years, during which RFS lost almost $700,000, four or five different prospective sales fell through for various reasons, including, in 1995, Ford’s refusal to approve one of the sales. In December 1995, RFS sought Ford’s approval of a proposed sale of its Ford dealership to Rochester Lincoln Mercury, Inc. (“RLM”). Ford refused its consent on the grounds that RLM’s track record in sales was too weak; RFS’s owners were disappointed, but continued to search for a buyer.

On January 23, 1998, RFS finally executed an agreement to sell the Ford dealership to Dennis Roberts and Kevin Donovan, owners of Granite Ford.

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Bluebook (online)
287 F.3d 32, 2002 WL 603056, Counsel Stack Legal Research, https://law.counselstack.com/opinion/rochester-ford-sales-inc-v-ford-motor-co-ca1-2002.