therefore concludes that Pennsylvania law on the validity of releases is not incongruous with the Dealers' Day Act.
Generally, "under Pennsylvania law where the contracting party is free to come and go and to consult with counsel, there can be no duress in the absence of threats of actual bodily harm." Three Rivers, 522 F.2d at 893, citing Carrier v. Wm. Penn Broadcasting Co., 426 Pa. 427, 430-31, 233 A.2d 519 (1967) (footnote omitted). Taking as true Wahsner's and Novin's deposition testimony, as is required in deciding a summary judgment motion, there is a material question of fact as to whether they were free to leave and consult counsel. Both testified, during their respective depositions, that they were told that if they did not resign during the meeting, they would leave with absolutely nothing.
They could have understood this statement to mean that they had to resign or actually walk home. Although they were permitted to discuss the matter by themselves, there is no indication that they had access to a telephone with which to call a lawyer. That they may have negotiated, without the assistance of counsel, more benefits than were originally offered does not negate the fact that they may not have been provided with the opportunity to consult counsel. With counsel, they may have received even better benefits or decided not to resign and sign the release after having been apprised of their rights under the Dealers' Day Act.
Under Pennsylvania law, executing a contract under duress renders that contract voidable, not void. National Auto Brokers v. Aleeda Development Corp., 243 Pa. Super. 101, 108-09, 364 A.2d 470 (1976). Such a contract can be ratified "if a party who executed a contract under duress accepts the benefits flowing from it, or remains silent, or acquiesces in the contract for any considerable length of time after the party has the opportunity to annul or avoid the contract." Id. at 114. Nevertheless, Wahsner's and Novin's failure to return the consideration they received in exchange for their resignations and releases does not necessarily mean their duress claim fails. Unlike Pennsylvania law on the validity of releases, Pennsylvania law on the ratification of an otherwise voidable release strikes this court as incongruous with the Dealers' Day Act. For one, the Dealers' Day Act was enacted to provide redress for the very type of activity alleged here -- a bad faith termination caused by coercion. As the Supreme Court stated in Sola Electric Co. v. Jefferson Electric Co., "the prohibition of a federal statute may not be set at naught, or its benefits denied, by state statutes or state common law rules." 317 U.S. 173, 176, 87 L. Ed. 165, 63 S. Ct. 172 (1942). See also Home Box Office v. Spectrum Electronics, Inc., 100 F.R.D. 379, 382 n.1 (E.D. Pa. 1983); Taxin v. Food Fair Stores, Inc., 197 F. Supp. 827, 830-31 (E.D. Pa. 1961). Because there is a dearth of federal statutory or common law addressing the effect of a party's failure to return consideration, the courts in Home Box Office and Taxin turned to the Restatement of Contracts § 480. The benefits received and retained by Wahsner and Novin were either money or services to which a value can be assigned. If Wahsner and Novin are successful at trial, under § 480 these benefits can be credited against damages once determined.
Defendants' motion for summary judgment is denied and Wahsner and Novin will be allowed to proceed to trial.
An appropriate order follows.
AND NOW, this 23rd day of October, 1984, for the reasons stated in the accompanying memorandum, it is hereby ORDERED that defendants' motion for summary judgment is DENIED.