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MHB DISTRIBS. v. PARKER HANNIFIN CORP.

September 4, 1992

MHB DISTRIBUTORS, INC.
v.
PARKER HANNIFIN CORPORATION and RG INDUSTRIES, INC.



The opinion of the court was delivered by: LOUIS H. POLLAK

 Pollak, J.

 Defendants Parker Hannifin Corporation ("Parker") and RG Industries ("RG") have moved for summary judgment on each count of plaintiff MHB Distributors' ("MHB") Amended Complaint. For the reasons that follow, defendants' motion will be granted.

 I.

 When considering a summary judgment motion, the court must take as true the evidence of the non-movant and draw all justifiable inferences in the non-movant's favor. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986). For purposes of this summary judgment motion, then, the facts of the case are as follows:

 Parker is a manufacturer of hydraulic and pneumatic components and systems, and has developed a nationwide network of Parker product distributors. In 1987, MHB acquired the assets of a Parker distributorship, Pneumatics & Hydraulics, Inc., *fn1" and became a distributor of both Parker fluid power and fluid connector products. Upon becoming a Parker franchise, MHB signed Parker's Basic Agreement and several Distribution Agreements establishing the terms of the business relationship.

 Two aspects of the contracts are particularly relevant in this case. First, the Basic Agreement prohibited MHB from assigning or transferring in whole or part its Parker distribution rights without Parker's prior consent. MHB could not change ownership absent prior written consent of Parker.

 Second, the Distribution Agreements defined the area of MHB's primary responsibility. MHB's area of primary responsibility for the sale of fluid power products was Southeastern Pennsylvania. *fn2" For other Parker products MHB served as the distributor for Southeastern Pennsylvania, Southern New Jersey, Northern Maryland and Northern Delaware.

 In October 1989, Parker put MHB on "credit hold," and refused to ship any more Parker products to MHB. MHB contends that Parker's conduct was unwarranted and that the effect of the "credit hold" was, ultimately, to put MHB out of business. Amended Complaint at P 25.

 To escape the growing financial bind, MHB wanted to sell its business. Parker suggested that MHB meet with RG -- a Parker distributor based in York, Pennsylvania -- as RG might be interested in buying the company. While MHB did meet with RG, RG refused to submit what MHB believed to be a competitive bid for the company. See Bradshaw Deposition, Ex. 2, Plaintiff's Brief in Opp. at 383-386.

 Independently, MHB found other interested buyers willing to negotiate for the purchase of MHB, but only on the condition that Parker give its preliminary consent to the assignment of MHB's distribution rights. Parker declined to give its preliminary consent in any instance.

 Thereafter, Parker allowed RG to supplant MHB as distributor by giving RG the customer orders MHB had placed with Parker and, subsequently, MHB's customer list. In February 1990, MHB received a letter from Parker saying its franchise had been terminated.

 Based on the above facts, MHB raises eight claims, some against both Parker and RG, and others against them individually. MHB makes two claims against both Parker and RG: conspiracy in violation of section 1 of the Sherman Antitrust Act ("Sherman Act") to restrain trade in the sale of MHB's distribution business (count I); and conspiracy to interfere with MHB's business relationships (count VII). Counts II through VI name only Parker as defendant, and include: breach of duty of good faith and fair dealing in the fulfillment of the terms of the contract (count II); intentional interference with MHB's business and contractual relationships (counts III and ...


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