Zarbock v. Chrysler Corp.

235 F. Supp. 130, 1964 U.S. Dist. LEXIS 8923, 1965 Trade Cas. (CCH) 71,361
CourtDistrict Court, D. Colorado
DecidedSeptember 21, 1964
DocketCiv. A. No. 6817
StatusPublished
Cited by7 cases

This text of 235 F. Supp. 130 (Zarbock v. Chrysler Corp.) is published on Counsel Stack Legal Research, covering District Court, D. Colorado primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Zarbock v. Chrysler Corp., 235 F. Supp. 130, 1964 U.S. Dist. LEXIS 8923, 1965 Trade Cas. (CCH) 71,361 (D. Colo. 1964).

Opinion

ARRAJ, Chief Judge.

Plaintiff instituted this action against defendants under the Automobile Dealers’ Day in Court Act, 15 U.S.C. §§ 1221— 1225, to recover damages for an alleged [131]*131lack of good faith in failing to comply with the provisions of certain franchise agreements between the plaintiff and defendant. Trial was to the Court without the intervention of a jury, and at counsel's request simultaneous briefs and written argument were submitted in lieu of oral argument.

Discussion

Plaintiff has been a Chrysler dealer in Ordway, Colorado, since 1940. On November 19, 1952, he executed a “Sales Agreement Between Chrysler Direct Dealer and Chrysler Corporation, Chrysler Sales Division.” This agreement, as amended, governed the relationship between the parties until it was cancelled and new agreements were entered into on October 4, 1957. These later agreements consisted of the “Chrysler-Plymouth Direct Dealer Agreement” and the “Imperial Direct Dealer Agreement.” Both of these agreements were in effect at the time of trial.

During the years 1957 through 1960, until the commencement of this action on June 2, 1960, plaintiff experienced many instances of considerable delay between order dates and actual delivery of new ears to him. There were also several occasions during this period when plaintiff was drafted to pay for cars prior to their actual receipt. In the latter part of 1958, defendant’s agents asked plaintiff to relinquish the Imperial franchise. He refused to do so, and ■defendant abandoned its efforts to obtain relinquishment. In 1960, after the commencement of this action, plaintiff obtained a Valiant franchise from defendant.

From these facts evidencing certain delays, early drafting and miscellaneous problems, plaintiff alleges defendant failed to “act in good faith” within the meaning of 15 U.S.C. § 1222. We now turn to a closer analysis of each of these three general problem areas.

Delivery Delays

Plaintiff has submitted into evidence •over one hundred specification schedules, which show lengthy delays between order and delivery; several were in excess of forty-five days, but only nine were in excess of ninety days. The average delivery time was probably from four to six weeks. Plaintiff concedes that “four to five weeks” is normal delivery time, and it is to those deliveries substantially in excess of that time which he directs his complaints.

At least seventy five percent of plaintiff’s orders were “sold” orders, that is, sold to a specific customer. These orders necessarily reflect customer preferences in the form of special body styles, color combinations, accessories and equipment. Defendant has offered some plausible explanation for almost every instance of prolonged delay cited by the plaintiff.

a. 1957 Model Year — This year was the one with the greatest number of delays in excess of ninety days. The evidence clearly establishes that 1957 was an “unusual year” in Chrysler history. In an effort to recapture what management figured to be its proper share of the market, the automobiles originally contemplated for the 1958 model year were brought into the market during the 1957 model year. Consequently, the lead time was shortened considerably, creating an abnormal production situation wherein demand for the products exceeded the supply. It took many dealers “two, three or four months” to fill a “sold” order. In fact, on a nationwide basis, defendant was not able to fill all of its “sold” orders that year.

The lengthy delays in delivery time for this model year were explained by defendant as being caused by production problems; more specifically, the demand for the Plymouth that year greatly exceeded defendants’ expectations and only about one in five orders for this auto could be filled in the normal time. The Chrysler New Yorker sedan was in short supply that year, and the Windsor 4-door sedan was a “hot-item” that year and some orders for it were never filled.

For this model year, the evidence discloses no pattern of consistent lengthy delays in delivery, and there is no evi[132]*132dence of intentional delays. Undoubtedly, the procedures for processing orders and effecting deliveries could have been improved upon, but the evidence fails to show that plaintiff’s orders were treated or handled any differently than those of other franchised dealers.

b. 1958 Model Year — This was categorized by defendant’s witnesses as also being an “unusual year” in Chrysler history; but it was unusual in an entirely different way. There was a general economic recession, production had been cut back, and the demand for cars was down. The evidence shows only two deliveries in excess of ninety days that year. Plaintiff admits on cross-examination that he had no real delay problems with this model year, hence industry conditions explaining late deliveries need not be elaborated upon.

c. 1959-60 Model Years — This period revealed further production problems in the Chrysler family. In late 1958, there was a glass strike by Pittsburgh Plate Glass, which supplies ninety percent of defendants’ glass. This strike affected the procurement of 1959 model samples on time. In 1959, there was a steel strike, which further affected the production schedules.

A Plymouth Station Wagon was ordered on July 30, 1959, but was not received until 90 days later. This order was placed prior to introduction of the series, and early production of station wagons is always slow. The evidence shows that an 86 day and a 91 day delay were experienced on two Plymouth deliveries. Both of these cars contained Golden Commando Engines, which were extremely difficult to obtain, and both of these orders were placed just prior to the Christmas rush. The evidence further shows a delay in receiving a Chrysler display car of over six months. This longest of all delays has never been adequately explained. It was the general testimony of defendants’ witness, however, that all 1960 display models were affected by the glass strike.

Evidence submitted by defendants discloses a compilation of 1959 model deliveries taking over 30 days. The figures are for the Kansas City Region, within which plaintiff’s place of business fell. Many of the dealers in plaintiff’s region received cars in excess of 100 days after they were ordered. This sampling was said to be somewhat typical of defendants' delivery problems for the years in concern.

The evidence further discloses in regard to all delays that a normal trucking time of 5-7 days in getting cars to Ordway must be considered. If the carrier did not have a full truck load, the load would have to be made up from elsewhere, and this slowed down the delivery time.

Plaintiff testified that because of cei*tain of these delays, he lost customers; that to satisfy his customers, he was often forced to purchase from other dealers and sell at a less than normal profit; and that because of these sizeable delays in the acquisition of ordered cars, his business reputation suffered greatly in the years 1957-60. This evidence goes to the matter of damages if defendants are held accountable.

Early Drafting

One of plaintiff’s main complaints is aimed at “early drafting.” He contends that he often had to pay for the cars prior to their delivery.

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235 F. Supp. 130, 1964 U.S. Dist. LEXIS 8923, 1965 Trade Cas. (CCH) 71,361, Counsel Stack Legal Research, https://law.counselstack.com/opinion/zarbock-v-chrysler-corp-cod-1964.