(f) In the last two years CGI and its dealers have been able to sell more automobiles than Ferrari can supply.
(g) CGI has recently become highly profitable. It posted a net income from operations of $ 708,472 in fiscal 1978 and $ 675,271 in the first six months of fiscal 1979. Due to a design problem prior years were much less successful.
6. Prior to 1978 Ferrari began to consider whether it or Fiat Motors of North America, Inc. (FMNA),
should assume the importation and distribution functions which CGI was fulfilling.
7. In early 1978 Ferrari decided to give notice of nonrenewal of the franchise agreement to CGI.
8. On May 16, 1978, Gary Rodriguez, who at all times pertinent to this dispute was acting on behalf of Ferrari, gave notice to CGI that the franchise agreements would not be renewed and therefore would terminate on December 31, 1978. This notice was thereafter confirmed by certified letter as required by the terms of the franchise agreement.
9. Immediately after giving the aforesaid notice, Rodriguez presented CGI with a draft of a new contract which would materially decrease the financial returns anticipated by CGI.
10. Other findings of fact are made in the Introduction and Discussion sections of this Memorandum and are incorporated here by reference.
At this stage of the proceedings, I find that the plaintiff has shown a reasonable likelihood of proving that:
1. Ferrari, through Rodriguez, coerced CGI by first giving notice of nonrenewal and then presenting a nonnegotiable proposal designed to maximize Ferrari's profit at the CGI's expense.
2. Ferrari exercised this coercion in bad faith because it attempted to use the nonrenewal notice as a lever to pressure CGI into accepting a contractual arrangement which would immediately eliminate it as an importer and later lead to its elimination as a distributor.
Although Ferrari would have us believe otherwise the evidence shows that Ferrari did not simply decide to terminate its relationship with CGI.
Had this been all that occurred perhaps Ferrari would be correct in its assertion that Berry Brothers Buick, Inc. v. General Motors Corp., 257 F. Supp. 542 (E.D.Pa.1966), aff'd per curiam, 377 F.2d 552 (3d Cir. 1967), and Ship & Shore Motors, Inc. v. British Leyland Motors, Inc., 1974-1 TRADE CASES P 75,102 at p. 96,903 (D.N.J.1974), support a denial of CGI's motion for a preliminary injunction. See Marquis v. Chrysler Corp., 577 F.2d 624 (9th Cir. 1978). However, the record contains ample evidence that unlike Berry Brothers and Ship & Shore this is not a case of arbitrary nonrenewal or of an attempt to accommodate a dealer by trying to work out an alternative arrangement after a firm decision to terminate has been made. In this case the manufacturer deliberately sought to put itself in a position where it would "give up as little as possible and yet avoid litigation." Exhibit P-5 (Mailgram from Gary Rodriguez to Piero Fusaro, a Ferrari official in Italy); Trial Transcript at 23. The following colloquy unequivocally establishes this:
(Question to Gary Rodriguez, called by plaintiff as of cross-examination):
Q: So that by beginning the negotiations with a notice of non-renewal, you felt that the only choice that the distributors would have is to have nothing because of the notice of non-renewal or the best deal they could make with you as the representative of Ferrari, is that correct?