Solargen Electric Motor Car Corp. v. American Motors Corp.

530 F. Supp. 22, 1981 U.S. Dist. LEXIS 14940
CourtDistrict Court, S.D. New York
DecidedSeptember 15, 1981
Docket80 Civ. 3809 (RLC)
StatusPublished
Cited by6 cases

This text of 530 F. Supp. 22 (Solargen Electric Motor Car Corp. v. American Motors Corp.) is published on Counsel Stack Legal Research, covering District Court, S.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Solargen Electric Motor Car Corp. v. American Motors Corp., 530 F. Supp. 22, 1981 U.S. Dist. LEXIS 14940 (S.D.N.Y. 1981).

Opinion

OPINION

ROBERT L. CARTER, District Judge.

Plaintiffs in this antitrust action are two small interrelated companies specializing in the production of electric motor vehicles and their components. Plaintiffs, hereafter referred to as “Solargen,” have brought suit against American Motors Corporation and American Motors Sales Corporation (“the American Motors defendants,” “American Motors”) for breach of contract and for violation of the Sherman Act, 15 U.S.C. § 1 et seq. The American Motors defendants have moved pursuant to Rule 56, F.R.Civ.P., for partial summary judgment dismissing counts one through eight of the complaint, 1 these stemming from an abortive transaction in which Solargen attempted to purchase 3,000 motorless Concord vehicles (“Concord gliders”) at a price of approximately $3,000 per vehicle. Solar-gen alleges that the American Motors defendants reneged on a binding agreement to sell at that price, raised the price unjusti *24 fiably to $4,593 per vehicle, and then following Solargen’s acceptance of the higher price, delayed delivery of the vehicles unnecessarily. Solargen further alleges that the price increase and the delays were the result of pressure from defendant General Motors Corporation (“General Motors,” “GM”), and that by acting in this manner for the purpose of sabotaging Solargen’s prospects of commercial success, American Motors were engaging in a conspiracy with GM in violation of the Sherman Act. American Motors denies that it had any contact with General Motors regarding the Solargen transactions, that it had ever agreed to sell Concord gliders for any price less than $4,593, or even provided any basis for Solargen reasonably to rely upon a lower figure, or that it had ever caused any intentional or unnecessary delays in the delivery of Concord vehicles.

Solargen has brought suit against General Motors for a plethora of alleged abuses, including, inter alia, activities of commercial espionage carried on by GM consultant Robert Keyes against Solargen, bribery of Stanley Caulder (a scientist), Herbert Weisbaum (a TV reporter) and Dean Walters (a TV cameraman) for the purpose of disseminating unfavorable publicity about Solargen, intimidation of Solargen’s poten-, tiab suppliers, General Electric and American Motors among them, and deliberately making false claims to the public about GM’s expected progress in producing electric vehicles. These allegations are presented under the legal rubric of conspiracy and monopoly claims within the meaning of Sections 1 and 2 of the Sherman Act, as well as the common law torts of intentionally destroying a business, inducing breach of contract, and the prima facie tort of “unethical conduct.” General Motors has moved pursuant to Rule 56, F.R.Civ.P., for summary judgment dismissing all claims against it. 2

Both the American Motors’ motion for partial summary judgment and the General Motors’ motion for summary judgment are granted. The breach of contract claims against American Motors are dismissed because careful review of the documents submitted to the court shows that there was never a contract for sale of Concord gliders at a price of $3,000 apiece, that Solargen had no reasonable basis on which to rely upon any price lower than $4,593, and that delays in the delivery of the gliders were not the fault of American Motors. The conspiracy claims against American Motors are dismissed for the same reason that all claims against General Motors are dismissed — notwithstanding the completion of substantial discovery by Solargen, there is no evidence in support of the claims and there is substantial evidence to the contrary.

The breach of contract claim against American Motors stems from their refusal to deliver Concord gliders at a price of $3,000 each. American Motors and Solar-gen, represented by its attorney Stephen J. Romer, began negotiations over the sale of Concord gliders during the summer of 1979. Solargen has submitted affidavits stating that Romer came to believe that a binding contract for the sale of 3,000 gliders at $3,000 apiece existed as of the end of July, 1979, and that other Solargen employees relied upon Romer’s belief in making plans for the production of Solargen electric vehicles.

There is, however, no evidence that Rom-er’s reliance on the $3,000 price was at all reasonable, or that American Motors ever made or accepted an offer at that price. Documents submitted to the court show that American Motors explicitly left open the price even in its July 31 draft of the proposed agreement with Solargen. No price quotation was delivered by American Motors until the figure of $4,593 per vehicle was approved by its senior management and mailed to Solargen on September 5. Indeed, no price quotation could have been delivered earlier because it was only in late August that Solargen finalized its choice of *25 standard and optional equipment to be included in the gliders.

Throughout the summer Romer’s negotiations were conducted principally with Robert J. Swaim, Manager of American Motors’ Engine and Component Sales Department (“E & CS”), and William M. Bain, E & CS’ regional sales manager for the Eastern United States. Bain and Swaim both attest that they never even suggested that the gliders might be available at a price of $3,000. Rather, they remained silent as to price, stating only that it would have to be determined later. Both the July 31 proposed agreement and repeated statements of Bain and Swaim explicitly informed Romer that any negotiated arrangement would have to be approved by American Motors’ top senior management before it could become operative. Accordingly even if Bain or Swaim had reinforced Romer’s mistaken belief in a price of $3,000, Romer should have known that he could not rely upon their statements to bind American Motors.

Solargen’s assertion of unreasonable delays by American Motors in delivering Concord gliders is clearly without merit. The only substantial delay came in November when Solargen itself sought to defer future shipments for the months of December and January, and refused to accept delivery of 83 gliders that had been shipped. While American Motors’ decision to crash test Solargen vehicles may have caused a few days’ delay, the purpose of such tests was to insure that the vehicles were in compliance with federal safety standards. Moreover, Romer had been informed in June that such tests would be necessary unless Solargen obtained a waiver of the official safety requirements. No waiver was obtained, hence American Motors was entirely correct in requiring the tests.' Needless to say, when a party’s conduct is totally above reproach, it cannot form the basis of an action against the party in either contract or antitrust.

Solargen’s allegations of a conspiracy spearheaded by General Motors are without support. As to the claim of conspiracy, all American Motors’ personnel who played a significant role in the Solargen transactions categorically deny having had any contact whatever with General Motors or its representatives. Similarly, General Motors’ management deny all involvement in the Solargen-American Motors business dealings.

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530 F. Supp. 22, 1981 U.S. Dist. LEXIS 14940, Counsel Stack Legal Research, https://law.counselstack.com/opinion/solargen-electric-motor-car-corp-v-american-motors-corp-nysd-1981.