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BERRY BROS. BUICK, INC. v. GMC

August 18, 1966

Berry Brothers Buick, Inc.
v.
General Motors Corporation (Buick Motor Division)


Wood, J.


The opinion of the court was delivered by: WOOD

WOOD, J.:

 This is a motion for summary judgment brought by General Motors Corporation (Buick Motor Division) (Buick) in an action to recover damages for allegedly failing to act in good faith toward Berry Brothers Buick, Inc. is not renewing its franchise. *fn1" The complaint is based on the Automobile Dealers Suit Against Manufacturers Act, 15 U.S.C.A. §§ 1221-1225. *fn2"

 Arthur Berry and Archie W. Berry, twin brothers, were at all times together with their families co-principals in ownership of plaintiff. They were franchised Buick dealers from 1937 to 1960 first as a partnership, then as a corporation. Arthur was President, Archie was Vice-President and Treasurer and the brothers and wives were directors of the corporation. The dealership consisted of at least a large showroom, a service station, a used car lot, a parking lot and about 96,000 square feet of land.

 Berry Brothers operated the dealership from 1956 to 1960 under a contract dated March 1, 1956 for a stated term which expired October 31, 1960.

 The agreement provided that it would automatically terminate without notice or action on the part of either party at the end of the stipulated term. No specific obligation was imposed on either party to renew the contract after October 31, 1960.

 Arthur Berry had full responsibility for the daily operation of the dealership and made all of the business decisions. Archie had severed his connections with Berry Buick many years before 1959. Archie complained about the loss of money to Arthur who failed to satisfy him by better performance.

 Arthur regarded the Buick automobile as the reason for his poor sales and was openly contemptuous of their selling ability. There was much validity to his assessment in that Buick registrations in the Philadelphia metropolitan area fell from 12,378 in 1956 to 2,517 in 1959. Arthur complained also of the poor neighborhood in which the shop was located and the ill-fortune of the dealership in not attracting automobile traffic.

 The dealer does not complain of Buick's failure to perform its part of the agreement fairly or promptly or of any limitations imposed on its sales of products other than Buick's. Berry in fact sold Ideal outboard boats, Opel automobiles and used cars taken in trade by his brother Lawrence who operated a Volvo dealership. Nor does Berry Brothers allege that it was compelled to buy or pay for automobiles or for parts which it did not need for its customers.

 Charles Thieleman was Buick's Philadelphia zone manager who is alleged by Arthur Berry to be the entire cause for the non-renewal. The depositions indicate he was at least an aggressive backer of Buick's products and most likely a stern and hard man who had little regard for the personalities at Berry Brothers. Plaintiff contends that Thieleman was looking for a scapegoat for Buick's losses and chose it. Another motive imputed to Thieleman's action was that he was highly favorable to other Buick dealers competitive with Berry Brothers. The zone manager has been termed as one who "had it out for [Arthur]" and one who was "arrogant and abrupt in his mannerisms."

 Buick on several occasions communicated with the dealership and recommended changes in its sales program. On May 9, 1960, Arthur and Archie were notified at a meeting with Mr. Kemp and Mr. Thieleman of Buick's dissatisfaction with their performance and of its decision not to renew the franchise. Buick formally notified plaintiff by letter dated June 3, 1960. The reasons given were essentially that Archie was no longer an active member of the dealership and that Arthur has been unable and unwilling to provide the type of management required for the operation of a quality Buick dealership. Arthur was deemed unco-operative and unwilling to listen to Buick's many suggestions to obtain for plaintiff the type of market penetration which Buick products deserve. Buick's representatives also showed figures demonstrating the downward trend of Buick sales obtained by plaintiff in Philadelphia. The percentage of the metropolitan potential of plaintiff's sales had fallen from 9.7% in 1955 to 7.2% in 1956-1958 to 5.3% in 1959. Buick further stated it saw nothing to indicate any improvement in the dealership.

 On a motion for summary judgment all inferences must be drawn in favor of the non-movant. However, he cannot withhold his evidence until the date of trial but must show by some admissible evidence that there is a genuine issue as to a material fact. Plaintiff cannot rest on an ignorance of the facts but must obtain from discovery or otherwise information which he should seek to amplify or test by further discovery. Robin Construction Company v. United States, 345 F.2d 610 (3rd Cir. 1965).

 The Automobile Dealers' Act was intended to "supplement the antitrust laws . . . in order to balance the power now heavily weighted in favor of automobile manufacturers . . ." 70 Stat. 1125 (1956). Coercive conduct must be interpreted in the light of the Preamble's purpose and of the difficulties which dealers had in court attempting to enforce the prior antitrust laws. Kessler, ...


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