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Bateman v. Ford Motor Company.

filed: December 13, 1962.


Author: Ganey

Before McLAUGHLIN, KALODNER and GANEY, Circuit Judges.

Opinion of the Court

By GANEY, Circuit Judge: This is a proceeding by way of injunction to compel the defendant to continue a business relationship which had existed at the time suit was brought. The suit is based on a violation of the Dealer's Day in Court Act of August 8, 1956, C. 1038, 70 Stat. 1125, 15 U.S.C. ยงยง 1221-1225.*fn1

The business of the plaintiffs had been the buying and selling of Ford automobiles under a franchise from the defendant since 1933, a period of 29 years. On or about November 3, 1961, the defendant gave notice of the termination of the plaintiffs' franchise to sell their cars as of February 3, 1962. Negotiations looking toward agreement between the parties continued until January 8, 1962, without success, and on that date the plaintiffs filed their complaint, the first count of which alleged that the threatened termination of the franchise was unfair and inequitable and as such a violation of the Dealer's Day in Court Act, and the second count of which alleged a violation of the Robinson-Patman Act.Defendant stopped delivery of plaintiffs' orders after February 3, 1962.

For a complete understanding of the procedures involved herein, it is necessary to detail the various steps taken climaxing the matter now before us for disposition.

Plaintiffs, pursuant to the first count of the complaint, filed a motion on January 9, 1962, for a preliminary injunction, on which the court fixed a hearing for January 22, 1962. On January 18, 1962, a motion to dismiss the complaint was filed by the defendant on the ground that it sought injunctive relief which was not permissible under the Dealer's Day in Court Act. The court below, without a hearing on the facts, entered a judgment on January 23, 1962, in which it dismissed the complaint insofar as it requested injunctive relief.

An appeal from this judgment was taken together with the motion in this Court for an injunction pending appeal. The motion for an injunction pending appeal was denied on January 25, 1962, but this Court ordered that the appeal be expedited at a hearing on the merits of the injunction. On February 23, 1962, after argument in this Court, the judgment of the court below was reversed on March 28, 1962, Bateman v. Ford Motor Company, 302 F.2d 63 wherein the late Judge Goodrich stated: "To make the remedy provided by the statute effective in accomplishing what is meant to be accomplished, we think that the dealer needs equity help in keeping his business going while his legal claim is being tested. A judgment for damages acquired years after his franchise has been taken away and his business obliterated is small consolation to one who, as here, has had a Ford franchise since 1933."

The defendant filed a petition for rehearing in this Court and during its pendency, on April 3, 1962, plaintiffs filed in the district court a motion for an injunction pending appeal. A hearing was held on this motion and, at the court's suggestion, it was treated as a motion for a preliminary injunction. Before receiving notice of the denial of defendant's petition for rehearing by this Court, the district court, in April 18, 1962, entered an order denying a preliminary injunction. The plaintiffs applied to this Court for an injunction pending appeal which was denied on April 26, 1962, without prejudice to the presentation of a similar motion on a new appeal, since the mandate of this Court had not been returned to the court below. On April 27, 1962, the district court again entered an order denying the plaintiffs' request for a preliminary injunction from which an appeal was taken on April 30, 1962. Another motion for an injunction pending appeal was denied on May 15, 1962, and the matter is now before this Court on the plaintiffs' appeal from the action of the court below in dismissing the petition for a preliminary injunction.

The testimony presented to the district court on behalf of plaintiffs was in connection with the alleged bad faith of the defendant in terminating the franchise, and also related to the balancing of equities and the consideration of the relative factors involved. The defendant, without offering any evidence in its side of the case, moved for the dismissal of the request for a preliminary injunction, which motion, as has been indicated heretofore, was allowed.

No findings of fact were made by the court below. The only reference thereto is the denial by the court of suggested findings of fact submitted by the plaintiffs, on the ground that the court was unable to adopt them because of insufficient proof thereof. The basic fact at issue here is whether or not the contract was terminated in bad faith by the defendant, since if it was so terminated, it will not be binding on the plaintiffs. The court below held that, ". . . after hearing all of the plaintiffs' evidence and arguments, this Court finds that plaintiffs have failed to meet the burden required of them and, therefore, finds as a fact that plaintiffs have failed to prove bad faith, coercion, discrimination, or threatened irreparable harm warranting the issuance of a preliminary injunction under the law . . ." This is merely an ultimate finding and the court states no facts on which it is predicated. However, without passing any opinion on the correctness of the view reached by the court below, it is incumbent upon the court, in conformity with Rule of Federal Procedure 52(a), that in refusing an interlocutory injunction, the court must set forth findings of fact and conclusions of law upon which it predicates its action. In Sims v. Greene, 160 F.2d 512 this Court said, ". . . a temporary injunction issued illegally since no findings of fact and conclusions of law were made by the court below as required by Rule 52(a)."

Additionally, previous to the 1946 amendment to Rule of Federal Civil Procedure 41(b),*fn2 there was a split of authority among the Circuits, this Circuit holding, along with the Fourth Circuit, that all the court was called upon to decide on the motion was a question of law and hence no findings of fact were requisite. Federal Deposit Insurance Corporation v. Mason, 115 F.2d 548; Schad v. Twentieth Centrury Fox Film Corporation, 136 F.2d 991; Whitley v. Powelll, 159 F.2d 625. In the Sixth, Seventh and Ninth Circuits, a contrary view was held and findings of fact were necessary to be found. Gary Theatre Company v. Columbia Pictures Corporation, 120 F.2d 891; Bach v. Friden Calculating Machine Co., Inc., 148 F.2d 407; Barr v. Equitable Life Assurance Society of the United States, 149 F.2d 634. However, for this Circuit, the confusion that had obtained previous to the 1946 amendment to Rule 41(b) was dissipated and this Circuit flatly took the position in O'Brien v. Westinghouse Electric Corporation, 293 F.2d 1, 9, that findings of fact in a non-jury case, after a motion for dismissal was filed under 41(b), are requisite.

The record here discloses a factual situation which would only admit of a proper review by the lower court making findings of fact and conclusions of law in connection therewith. Kreielsheimer v. Cohen, et. al., 252 F.2d 330.

The judgment of the district court will be reversed and the cause remanded to the district court with directions to proceed in accordance with this opinion.

KALODNER, Circuit Judge, dissenting: The majority here reverses an Order of the District Court which denied and dismissed a preliminary injunction sought by the plaintiffs, and remands the cause to the District Court on the ground that it failed to find ...

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