Van Riper v. Ford New Holland, Inc.

862 P.2d 47, 261 Mont. 206, 50 State Rptr. 1289, 40 A.L.R. 5th 827, 1993 Mont. LEXIS 311
CourtMontana Supreme Court
DecidedOctober 21, 1993
Docket92-139
StatusPublished
Cited by2 cases

This text of 862 P.2d 47 (Van Riper v. Ford New Holland, Inc.) is published on Counsel Stack Legal Research, covering Montana Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Van Riper v. Ford New Holland, Inc., 862 P.2d 47, 261 Mont. 206, 50 State Rptr. 1289, 40 A.L.R. 5th 827, 1993 Mont. LEXIS 311 (Mo. 1993).

Opinions

JUSTICE McDONOUGH

delivered the Opinion of the Court.

Ford New Holland, Inc. (Ford New Holland), appeals from ajudgment entered by the District Court for the Eighth Judicial District, Cascade County. The court assessed damages, costs, and attorney fees against Ford New Holland for violations of §§ 30-11-802 and -803, MCA, and breach of the covenant of good faith and fair dealing. Ford New Holland appeals. We affirm.

The issues are:

1. Did the District Court err by applying §§ 30-11-802 and -803, MCA, to the Versatile Agreement?

2. Did the District Court err in concluding that Ford New Holland violated §§ 30-11-802 and -803, MCA?

3. Did Ford New Holland breach the implied covenant of good faith and fair dealing?

4. Did the District Court err in awarding damages?

5. Did the District Court err in awarding attorney fees?

Robert and Jean Van Riper (the Van Ripers), owned and operated Van’s Tractor, Inc. (Van’s Tractor), in Havre, Montana. Van’s Tractor sold new and used tractors and other farm equipment. Van’s Tractor entered a dealership agreement with Versatile Farm Equipment (Versatile) on November 2, 1983.

In 1987, Versatile, then in bankruptcy, sold certain of its assets, including the Van’s Tractor Versatile franchise, to Ford New Holland, a subsidiary of Ford Motor Company. Versatile sold other of its assets, including a Noble plow line, to Vicon Farm Equipment, Inc., a corporation unrelated to Ford New Holland. Van’s Tractor decided not to continue selling Noble products and returned its supply of Noble parts to Vicon.

Corporate mergers resulted in Ford New Holland then having two outlets in Havre, Van’s Tractor and an existing “company store.” The goal of Ford New Holland was to have one dealer in Havre. It sought a dealer who would buy out its interest in the company store. Van’s Tractor was a prospective purchaser. However, Ford New Holland [209]*209determined that Van’s Tractor would not be its full-line dealer in Havre. Ford New Holland did not notify Van’s Tractor of this decision.

In the fall of 1987, Ford New Holland designated Van’s Tractor for attrition as a Versatile dealer. The designation meant Van’s Tractor could not transfer its Ford New Holland dealership and had no future as a Ford New Holland dealer. Ford New Holland did not notify Van’s Tractor of this designation.

From 1987 to 1988, the net worth of Van’s Tractor declined. In the year ending April 1988, Van’s Tractor sold only one piece of Versatile equipment. The Van Ripers attempted to sell Van’s Tractor and received an offer in April of 1988, but Ford New Holland refused to approve transfer of the dealership. Ford New Holland then asked that Van’s Tractor resign its dealership because it had attempted to sell the franchise. Van’s Tractor refused.

In April 1988, Ford New Holland decided to terminate the Van’s Tractor dealership based on the refusal by Van’s Tractor to pay an $11,000 disputed bill. The position of Van’s Tractor as to this bill was that it would not pay the bill until it was credited for Noble parts it originally had obtained from Versatile and had returned to Vicon. The position of Ford New Holland was that although it had the right to collect the accounts of Versatile, it had no responsibility to fulfill the obligations of Versatile which had been assumed by Vicon.

Subsequently, Ford New Holland placed Van’s Tractor on “stop ship” status and withdrew its credit line. On May 20,1988, Ford New Holland drafted a letter demanding that Van’s Tractor pay the bill within ten days or be terminated as a dealer. Termination proceedings began on May 27, 1988. Van’s Tractor did not receive Ford New Holland’s demand letter until June 6, 1988, but it paid the disputed amount within ten days of that date.

Despite payment, Ford New Holland did not remove Van’s Tractor from “stop ship” status. As a result, Ford New Holland shipped a four-wheel drive tractor and a Versatile swather ordered by Van’s Tractor to the competing dealer in Havre. Van’s Tractor was unable to obtain any parts until August 23,1988. Van’s Tractor resigned its dealership in September of 1988, and then brought this lawsuit.

The case was tried to the court sitting without a jury. The court dismissed all individual claims of Robert and Jean Van Riper and all claims against Ford Motor Credit. The court found in favor of Van’s Tractor on its claims against Ford New Holland and awarded $443,000 in damages, attorney fees of $162,000, and $12,393 in costs. Ford New Holland appeals.

[210]*210I

Did the District Court err by applying §§ 30-11-802 and -803, MCA, to the Versatile Agreement?

The District Court found that Ford New Holland violated both § 30-11-802, MCA, and § 30-11-803, MCA. Ford New Holland contends that application of these statutes in this case is a prohibited retroactive application because the statutes were enacted in 1985, two years after the contract was entered between Versatile and Van’s Tractor.

The record demonstrates that in the spring of 1987, Versatile was insolvent and in receivership. It had ceased manufacturing, was negotiating liquidation of its assets, and was in bankruptcy. FordNew Holland assumed and undertook the duties and responsibilities of Versatile with respect to certain dealerships, including Van’s Tractor. Versatile had no intention of being responsible any longer under its dealership agreements; it was out of business. Beginning in the fall of 1987, Ford New Holland supplied Van’s Tractor with goods and financing. Van’s Tractor consented to this relationship and believed it was a Ford New Holland dealer.

Furthermore, the assignment was more than just a product change, which is what Ford New Holland would have us believe. As the District Court found:

Ford New Holland’s position that it was entitled to the assets but not the liabilities of the Versatile Agreement is itself sufficient evidence of a change in the duties and obligations under the Versatile Agreement to create a new agreement to which the requirements of MCA § 30-11-801 et. seq. otherwise apply.

This refers to Ford New Holland’s refusal to be bound by any obligations of Versatile in relation to the Noble plow line.

In support of its ruling the District Court cited Kealey Pharmacy & Home Care Serv. v. Walgreen Co. (W.D. Wi. 1982), 539 F.Supp. 1357, modified, 761 F.2d 345, damages set, 607 F.Supp 155. That case supports the view that a non-retroactive statute applies to contracts originally entered before the statute was enacted and which have been significantly altered after the effective date of the statute.

As stated by the District Court, one result of the 1987 sale of Versatile to Ford New Holland and others was that Vicon was responsible for crediting Van’s Tractor for returns of Noble parts for which Ford New Holland was, at the same time, attempting to collect payment. As Robert Van Riper testified, during the months [211]*211of delay before Van’s Tractor received payment from Vicon for the $11,000 in returned Noble parts, Van’s Tractor was placed, without notice, onC.O.D. status for parts shipped by Ford New Holland.

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Related

Astleford Equipment Co. v. Navistar International Transportation Corp.
611 N.W.2d 33 (Court of Appeals of Minnesota, 2000)
Van Riper v. Ford New Holland, Inc.
862 P.2d 47 (Montana Supreme Court, 1993)

Cite This Page — Counsel Stack

Bluebook (online)
862 P.2d 47, 261 Mont. 206, 50 State Rptr. 1289, 40 A.L.R. 5th 827, 1993 Mont. LEXIS 311, Counsel Stack Legal Research, https://law.counselstack.com/opinion/van-riper-v-ford-new-holland-inc-mont-1993.