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BATEMAN v. FORD MOTOR CO.

January 16, 1963

Howard BATEMAN and Marguerite B. Jones, Partners, trading as Ernest Jones Co.
v.
FORD MOTOR COMPANY



The opinion of the court was delivered by: LORD, JR.

On April 18, 1962, this Court filed its opinion and order denying plaintiffs' petition for temporary injunction. Bateman v. Ford Motor Co., 204 F.Supp. 357 (E.D.Pa.1962). On plaintiffs' appeal from that ruling, the judgment was reversed and the cause remanded with directions by a divided court. Bateman v. Ford Motor Co., 3rd Cir., 310 F.2d 805.

Prior proceedings are described in the opinion last cited, and in the following reported decisions -- all under the caption of Bateman v. Ford Motor Co., 302 F.2d 63 (3rd Cir., rehearing denied April 17, 1962); 204 F.Supp. 357 (E.D.Pa., April 18, 1962); 202 F.Supp. 595 (E.D.Pa., January 23, 1962); 310 F.2d 805 (3rd Cir., December 13, 1962).

 Inasmuch as this Court reaffirms its prior findings of fact and conclusions of law, its prior opinion, reported at 204 F.Supp. 357 (April 18, 1962), is incorporated and made part of this opinion as though restated here in its entirety.

 The suit is based on an alleged violation of the Dealer's Day in Court Act of August 8, 1956, c. 1038, 70 Stat. 1125, 15 U.S.C.A. §§ 1221-1225. The gist of the remedy is contained in Section 2 of the Act, 15 U.S.C.A. § 1222.

 'An automobile dealer may bring suit against any automobile manufacturer engaged in commerce, in any district court of the United States in the district in which said manufacturer resides, or is found, or has an agent, without respect to the amount in controversy, and shall recover the damages by him sustained and the cost of suit by reason of the failure of said automobile manufacturer from and after August 8, 1956, to act in good faith in performing or complying with any of the terms or provisions of the franchise, or in terminating, canceling, or not renewing the franchise with said dealer: Provided, That in any such suit the manufacturer shall not be barred from asserting in defense of any such action the failure of the dealer to act in good faith. Aug. 8, 1956, c. 1038, § 2, 70 Stat. 1125.'

 The matter has been argued before this Court and the Court of Appeals on a number of occasions, and there have been two hearings in which the plaintiffs presented the testimony of witnesses. The first hearing commenced on April 13, 1962, and was concluded on April 17th, 1962. References herein to the Notes of Testimony (i.e. 'N.T.') refer to the transcribed report of that hearing. A further hearing was granted on January 4, 1963, to permit plaintiffs to present further evidence in support of their claim of irreparable injury. The testimony adduced at that hearing has not yet been transcribed.

 The findings of fact and conclusions of law which follow are concerned solely with the plaintiffs' petition for temporary injunction. Nothing contained herein is to be taken as an expression of opinion, and much less as a ruling of any sort, on the merits of the plaintiffs' action for damages under the Act. The following findings are based on the testimony taken at the hearings mentioned in the paragraph preceding, and a complete review of the record in this case, including the parties' affidavits and exhibits, the several rulings and decisions heretofore cited, and all briefs and arguments of counsel.

 FINDINGS OF FACT

 1. Plaintiffs are Howard Bateman and Marguerite B. Jones, Partners, trading as Ernest Jones Co.

 2. Defendant is Ford Motor Company, an automobile manufacturer.

 '3. The defendant, from and after November 1958, has failed to act in a fair and equitable manner toward the plaintiff partnership, so as to guarantee the plaintiff partnership freedom from coercion, intimidation, or threats thereof, in: (a) performing and complying with the terms of the franchise contract; and (b) in threatening to terminate the franchise contract.'

 4. Subsequent to the filing of plaintiffs' complaint, and during the pendency of this action, the defendant has refused to furnish Ford Motor Company products to plaintiffs, and has treated the franchise contract as terminated.

 5. Plaintiffs' claim is based on termination by defendant of a sales agreement entered into between defendant and plaintiffs' predecessors on April 1, 1957, which termination is alleged to have been made in bad faith in violation of the Dealer's Act. (Pls. Ex. 1).

 6. Defendant's sales agreement, termination of which is the basis of plaintiffs' alleged claim under the Dealer's Act, provides as follows:

 Par. 27 -- 'Neither this agreement nor any right hereunder or interest herein may be assigned by the Dealer without the prior written assent of the Company, executed as provided in paragraph E of this agreement.'

 Par. E -- 'The Dealer acknowledges notice that (i) this agreement may be executed only in the manner provided therefor in paragraph D hereof, (ii) no one except the Vice President and General Manager or the General Manager or the General Sales Manager of the Ford Division of the Company, or the Secretary or an Assistant Secretary of the Company, is authorized to make or execute any other agreement relating to the subject matter hereof on behalf of the Company, or in any manner to enlarge, vary or modify the terms of this agreement, and they only by an instrument in writing, and (iii) no one except the Vice President and General Manager or the General Manager of the Ford Division of the Company, or the Secretary or an Assistant Secretary of the Company is authorized to terminate this agreement on behalf of the Company, and they only by an instrument in writing.' (Pls. Ex. 1)

 7. Paragraph F. of the sales agreement, as supplemented by the last written approval by defendant of any assignment thereof, dated August 9, 1957, such assignment being to a partnership consisting of Howard Bateman and the Estate of Ernest Jones, provides:

 'F. This agreement has been entered into by the Company with the Dealer in reliance (1) upon the representation and agreement that the following person(s) substantially participate(s) in the ownership of the Dealer:

 HOWARD BATEMAN 6860 Rising Sun Ave. Phila. Pa. 66 2/3%

 ESTATE OF ERNEST JONES

 (same address (33 1/3%' (Pls. Ex. 1).

 8. The Estate of Ernest Jones has no present interest or participation in the ownership of the Dealer and had no such interest at the time defendant gave notice of termination of the ...


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