OPINION OF THE COURT
GREENBERG, Circuit Judge.
I. INTRODUCTION
This matter comes on before this court on appeal from a final order of the district court entered September 28, 1999, granting judgment as a matter of law in favor of defendant Chrysler Motors pursuant to Fed.R.Civ.P. 50(a) after the close of all the evidence on plaintiff Northview Motors's breach of contract and Automobile Dealers Day in Court Act ("ADDCA"), 15 U.S.C. §§ 1221-25, claims. Northview also appeals from (1) an order entered March 7, 1995, to the extent that it granted Chrysler summary judgment on Northview's Pennsylvania Board of Vehicles Act ("BVA"), Pa. Stat. Ann. tit. 63, §§ 818.1 et seq., claims on the ground that they were barred by the statute of limitations and (2) an order entered February 9, 1996, to the extent it granted Chrysler summary judgment on Northview's claim for violation of a provision of Pennsylvania's Uniform Commercial Code ("UCC") which obligates contracting parties to act in good faith. See 13 Pa. Cons.Stat. Ann. § 1203. We will affirm the orders entered by the district
A. Factual Background
At the times material to this action, Northview, a Delaware corporation with its principal place of business in Pittsburgh, Pennsylvania, was an automobile dealership franchise selling and servicing Jeep and Eagle vehicles. Frank Cuda, Northview's sole shareholder, oversaw the dealership's operations. Chrysler, a Delaware corporation with its principal place of business in Detroit, Michigan, at the times material to this opinion manufactured Jeep and Eagle vehicles as successor to American Motors Corporation.
Cuda had been involved in the automobile industry since he was a child. See app. at 258. He began in the industry by working at his father's dealership between 1954 and 1968. See id. at 260. In 1968, Northview began selling new cars as an American Motors dealer in the North Hills section of Pittsburgh. See id. at 261. Cuda testified that throughout the 1970s and 1980s, Northview was a successful dealership consistently ranking as one of the top one hundred American Motors dealerships in the nation. See id. at 287. As an American Motors dealership, Northview marketed both the Jeep and Eagle lines of vehicles.
This case arose directly from events commencing on or about December 11, 1987, when Northview entered into an American Motors Sales Corporation Eagle Sales and Service Agreement ("Eagle SSA") and an American Motors Sales Corporation Jeep Sales and Service Agreement ("Jeep SSA") (collectively, the "SSAs"). Chrysler subsequently acquired American Motors Sales Corporation's Jeep and Eagle lines and became its successor in interest to the Jeep and Eagle SSAs in contractual privity with Northview.
Inasmuch as the suit Northview filed against Chrysler evolved out of the two SSAs to which Chrysler became a party after it purchased American Motors's Jeep and Eagle product lines, we set forth significant parallel portions of the agreements. Section 11(a) of the SSAs obligated Northview to use its best efforts to sell aggressively and effectively each and every model of the Jeep and Eagle product lines. See, e.g., exhs. at 152. Section 12 required that Northview be a member in good standing of the Dealer Advertising Association, an association which advertised lines of vehicles sold by its dealer members. See id. at 156.
Section 28 of the SSAs governed their termination. See exhs. at 161. It provided, in relevant part:
Id. at 162 (emphasis added).
Northview asserts that Chrysler had problems with the allocation of vehicles and parts availability immediately following the absorption of the Jeep and Eagle dealers into the Chrysler system. Thus, Northview presented evidence that it continuously was unable to obtain desired vehicles from Chrysler to sell to the public and was unable to fill a fleet order for Alamo Rent-A-Car. See id. at 305.
In addition to the supply problems Northview experienced under Chrysler, it asserts that it had problems because it was unable to obtain answers from local Chrysler management concerning questions critical to the efficient operation of its dealership. For example, Northview asserts that Chrysler never explained its system for new vehicle allocation properly, despite
Clearly there was animosity between Northview personnel and Cuda on the one hand and local Chrysler management, or zone employees, on the other. Northview asserts that the only response Chrysler gave it to its inquiries about Chrysler's processes was "That's the system." Chrysler employees, however, documented instances in which Cuda was uncooperative and verbally abusive towards them.
Northview asserts that its supply problems and the confusion at the dealership concerning Chrysler's operating procedures, combined with the personal animosity between Northview and Cuda and Chrysler zone personnel, caused it increasing financial problems. Northview claims that because it could not obtain vehicles it could sell, and instead was left with unwanted or slow moving vehicles, it was forced to sell vehicles out of trust.
Upon learning that Northview was closed for business, Chrysler, on July 19, 1991, sent it notice that it was canceling the Jeep and Eagle SSAs. After Northview failed in attempts to sell its dealership, it filed for protection under Chapter 11 of the Bankruptcy Code, but the bankruptcy court would not allow for a restructuring of the failing dealership. Chrysler sent its final notice of termination to Northview on December 12, 1991.
Although Northview argues that its financial troubles were attributable directly to the actions of Chrysler and its employees, plainly other factors contributed to its problems. Notably, in May 1984, the Attorney General of Pennsylvania filed suit against Northview alleging that it committed 109 separate violations of Pennsylvania's consumer protection laws, see app. at 605, an action that led to negative press coverage of Northview. See id. at 609-10. During the trial concerning the consumer fraud violations in May 1988, the Pittsburgh Press quoted Cuda as stating that the lawsuit had cost Northview a lot of money and that Northview's sales had "plunged from . . . one hundred ten cars a month to twenty or thirty cars." Id. at 603.
B. Procedural History
Northview and Cuda, individually, filed the complaint in this action in the district court on October 20, 1993, alleging claims predicated on Chrysler's alleged breach of contract and violation of state and federal statutory law, including claims under the BVA, the UCC, and the ADDCA. In particular, count one alleged that Chrysler breached the Jeep and Eagle SSAs as well as various statutory and contractual duties of good faith by conduct which demonstrated its:
Northview alleged that as a result of this conduct it was forced to cease doing business and that the Jeep and Eagle SSAs were terminated on July 10, 1991.
In count two, Northview and Cuda alleged that Chrysler, through its acts and omissions, violated the BVA. Specifically, the count alleged that Chrysler violated the following provisions of the Act by coercing Northview with respect to:
The count also charged Chrysler with:
In count three, Northview and Cuda alleged that Chrysler's intentional and/or negligent acts constituted tortious interference with business relations. Count four alleged Chrysler breached its duty of good faith in the UCC. Count five alleged that Chrysler violated the ADDCA.
In conclusion, Northview and Cuda alleged that "[a]s a result of the numerous breaches of good faith and wrongful and intentional acts by [Chrysler], Plaintiffs have suffered substantial damages including, but not limited to, the loss of Frank Cuda's life savings and investment, loss of profits including future profits, loss of franchise auto dealership and land, loss of salary and benefits." Thus, Northview and Cuda sought compensatory and punitive damages as well as attorneys' fees and costs.
On August 16, 1994, Chrysler filed a motion seeking a summary judgment dismissing all of Cuda's claims. The district court, in an opinion and order entered on March 7, 1995, granted that motion in an order from which Cuda does not appeal. As we shall explain, the court also partially granted Chrysler summary judgment against Northview at that time, even though Chrysler did not then move for summary judgment against Northview. Northview does appeal from that order.
On August 7, 1995, Chrysler filed a motion for summary judgment against Northview. Following a hearing on the motion held on December 6, 1995, the district court issued an order, entered on February 9, 1996, partially granting and partially denying the motion. On March 11, 1996, Chrysler filed a motion for reconsideration, which the district court denied by order entered March 14, 1996.
The court held a pretrial conference on May 6, 1996. Following the conference, the parties apparently settled the case on May 16, 1996, and thus the district court closed the case. The settlement, however, was not consummated, leading Chrysler on February 18, 1998, to file a motion to enforce the settlement agreement. On June 10, 1998, the district court entered an order granting the motion to enforce the settlement.
On July 7, 1998, Northview and Cuda filed an appeal from the order granting the motion to enforce the settlement. On June 18, 1999, for reasons implicating Northview's bankruptcy which we need not explain, we reversed the order of the district court enforcing the settlement and
There was a jury trial on the remand starting on September 14, 1999. At the close of Northview's case, Chrysler unsuccessfully moved for a judgment as a matter of law. Thereafter, Chrysler presented its case and the trial concluded on September 28, 1999. Chrysler then renewed its motion for a judgment as a matter of law and on September 28, 1999, the district court granted the motion, setting forth its reasons on the record. On October 26, 1999, Northview timely filed a notice of appeal from the September 28, 1999 order. Inasmuch as Northview appeals from the March 7, 1995, February 6, 1996 and September 28, 1999 orders, we describe them in some detail.
a. The March 7, 1995 Order
In its memorandum opinion and order entered March 7, 1995, the district court addressed Chrysler's motion for summary judgment with respect to Cuda's claims. The court determined that Cuda lacked standing to assert claims pursuant to the ADDCA, and accordingly entered judgment in Chrysler's favor on those claims. The district court also concluded that Cuda had failed to establish essential elements of his breach of contract and UCC claims in that he did not allege that he was a party to the agreements involved or that Chrysler owed him a duty of good faith under the UCC. Finally, with respect to Cuda, the district court determined that the statute of limitations barred his allegations of tortious interference with contract and violation of the BVA.
On its own motion, the court granted Chrysler summary judgment on statute of limitations grounds on Northview's claims of tortious interference and violations of the BVA, as the factual bases for these claims were the same as the bases for Cuda's claims. On this appeal, Northview challenges the district court's dismissal of its BVA claims as barred by the statute of limitations but, as we have indicated, Cuda does not appeal.
b. The February 9, 1996 Order
In its memorandum opinion and order entered on February 9, 1999, the district court addressed Chrysler's motion for summary judgment as to Northview's claims for violations of the ADDCA, breach of contract and breach of the duty to act in good faith as specified in the UCC, 13 Pa. Cons.Stat. Ann. §§ 1011 et seq. The court partially granted and partially denied the motion. The court found that Northview asserted two distinct ADDCA causes of action, one based upon both Chrysler's failure to act in good faith in performing and complying with the terms of the SSAs and the other for Chrysler's lack of good faith in terminating Northview's franchise.
The court determined that substantial questions of fact remained to be resolved with respect to Northview's ADDCA claim relating to the termination of its franchises. Accordingly, it denied the motion for summary judgment as to the ADDCA lack of good faith termination claim.
Chrysler, however, also moved for summary judgment as to Northview's claim that it failed to act in good faith in performing and complying with the provisions of the franchise agreements. Specifically, Chrysler asserted that the bad faith acts of which Northview complained were insufficient to state a claim or, in the alternative, were barred by the statute of limitations. The court found that the following alleged bad faith acts were insufficient, as a matter of law, to state a claim under the ADDCA:
App. at 25.
The district court reasoned that Northview had failed to present sufficient evidence of express or implied coercion, as required under the ADDCA, to allow it to proceed with the good faith and performance aspect of its ADDCA cause of action. In the absence of evidence that it coerced or intimated Northview, the district court determined that Chrysler was entitled to judgment as a matter of law on this claim.
The district court found that only two of Northview's allegations, other than those relating to termination, could state a claim for relief under the ADDCA: (1) that Chrysler threatened to terminate its franchise agreements with Northview unless Northview agreed to join an advertising campaign; and (2) that Chrysler forced Northview to accept new vehicles that it did not want or need. See id. at 26. This conduct, however, occurred in 1988 and 1987, respectively, and, as a result, the court found that any claims based upon these allegations were barred by the statute of limitations. See id. at 26-28. The court also noted that Northview had agreed expressly in the SSAs to "at all times be a member in good standing of the . . . Dealer Advertising Association." Id. at 28 n. 5. The district court therefore concluded that Northview's complaint with respect to being forced to join an advertising campaign failed inasmuch as the use of coercion to enforce a valid contractual provision is not wrongful under the ADDCA. See id. (citing Empire Volkswagen, Inc. v. World-Wide Volkswagen Corp., 814 F.2d 90, 97 (2d Cir.1987)).
When it addressed Northview's claim for breach of the covenant of good faith and fair dealing in the UCC, the district court found that Pennsylvania law did not provide for an independent cause of action for breach of the covenant of good faith. See app. at 33. The district court based this determination on the comment to 13 Pa. Cons.Stat. Ann. § 1203, Pennsylvania's version of the UCC provision codifying the obligation to act in good faith. See id. The comment provides:
13 Pa. Cons.Stat. Ann. § 1203, UCC Comment. Accordingly, the court entered judgment in favor of Chrysler on Northview's UCC claim.
c. Claims that Proceeded to Trial
Although Northview has focused its briefs on the Rule 50(a) order on the ADDCA claim, at trial it advanced both its breach of contract claim and its ADDCA claim which, in light of the district court's earlier rulings, was limited to a cause of action for "bad faith" termination of Northview's franchises. Accordingly, the court did not admit evidence of Northview's being forced to take unwanted cars, the warranty audits, and the failure of Chrysler to provide needed vehicles as substantive evidence to support a damages
d. The September 28, 1999 Order and Record Statements
As we have indicated, after the close of all of the evidence, the district court issued an order, dated September 28, 1999, granting judgment as a matter of law in favor of Chrysler on all remaining claims pursuant to Fed.R.Civ.P. 50(a), i.e., those under the ADDCA for termination of Northview's franchise and for breach of contract. The court set forth its reasons for granting judgment in favor of Chrysler on the record. See app. at 1279-80.
After hearing argument from the parties, the district court explained as follows:
App. at 1272-76.
The district court then clarified its opinion by stating:
Id. at 1277. Northview then appealed.
II. JURISDICTION
This case, although pleaded in conjunction with numerous state contract and statutory law claims, in part arose under the ADDCA, 15 U.S.C. §§ 1221-25. Accordingly, the district court had federal question jurisdiction pursuant to 28 U.S.C. § 1331. Inasmuch as the parties were not of diverse citizenship, the district court exercised jurisdiction over the state law claims pursuant to 28 U.S.C. § 1367 (supplemental jurisdiction). As Northview appeals from a final order of the district court, appellate jurisdiction is appropriate under 28 U.S.C. § 1291.
III. DISCUSSION
A. Points Raised
On this appeal Northview raises the following points:
B. Standard of Review
As we noted, to the extent appealed, the March 7, 1995 and February 9, 1996 orders of the district court granted summary judgment in favor of Chrysler. Our review of the order of the district court on a motion for summary judgment is plenary. See Seibert v. Nusbaum, Stein, Goldstein, Bronstein & Compeau,
After trial on Northview's breach of contract and ADDCA claims, the district court granted Chrysler's Rule 50(a) motion for judgment as a matter of law. We utilize a plenary standard to review a grant or denial of a judgment as a matter of law. See Shade v. Great Lakes Dredge & Dock Co., 154 F.3d 143, 149 (3d Cir. 1998); Salas v. Wang, 846 F.2d 897, 902 (3d Cir.1988). "[A] directed verdict is mandated where the facts and the law will reasonably support only one conclusion." McDermott Int'l, Inc. v. Wilander, 498 U.S. 337, 356, 111 S.Ct. 807, 818, 112 L.Ed.2d 866 (1991). A court should grant such a motion only "if, viewing the evidence in the light most favorable to the nonmovant and giving it the advantage of every fair and reasonable inference, there is insufficient evidence from which a jury reasonably could find liability." Lightning Lube, Inc. v. Witco Corp., 4 F.3d 1153, 1166 (3d Cir.1993); see also Shade, 154 F.3d at 149.
C. The Appropriate Statute of Limitations for Board of Vehicles Act Claims
The Pennsylvania Board of Vehicles Act ("BVA") provided at the times applicable here for a cause of action on the following terms:
Pa. Stat. Ann. tit. 63, § 818.20 (renumbered in 1996 as Pa. Stat. Ann. tit. 63, § 818.29).
In relevant part, the BVA prohibited the following conduct:
Pa. Stat. Ann. tit. 63, § 818.9 (renumbered in 1996 as Pa. Stat. Ann. tit. 63, § 818.12).
The BVA, however, does not include a statute of limitations. Further, insofar as we are aware, the Pennsylvania courts have not issued a published opinion deciding which statute of limitations is applicable to a claim brought under the BVA. As a result, we must make a prediction as to which statute of limitations the Pennsylvania Supreme Court would apply in a BVA action, a process that requires us to examine the theories of liability underlying Northview's claims. See Barnes v. The American Tobacco Co., 161 F.3d 127, 151 (3d Cir.1998).
The district court sua sponte applied a one-year statute of limitations based upon its determination that 42 Pa. Cons.Stat. Ann. § 5523 governed the time for bringing a BVA claim. See app. at 14. The court, however, relied upon a version of section 5523 no longer in effect at the time of its decision or at the time this cause of action accrued as the legislature had amended section 5523 in 1982 to read as follows:
42 Pa. Cons.Stat. Ann. § 5523. The parties are in accord that none of the actions or proceedings listed in section 5523, as amended in 1982, are applicable to a cause of action brought under the BVA and we are in agreement with them. Thus, the district court erred when it applied a oneyear statute of limitations to the BVA claims in this matter and Chrysler acknowledges this point.
Northview argues that the district court should have applied Pennsylvania's "catchall" six-year statute of limitations to its BVA claims in which event the claims would have been timely. See Appellant Br. at 10 (citing 42 Pa. Cons.Stat. Ann. § 5527). Section 5527 provides that "[a]ny civil action or proceeding which is neither subject to another limitation specified in this chapter nor excluded from the application of a period of limitation by section 5531 . . . must be commenced within in six years." Because we find the BVA claims are the subject of another period of limitation specified in the relevant statutory chapter, the six-year statute of limitations is not applicable here.
Chrysler suggested in the district court when moving for summary judgment against Cuda that a two-year statute of limitations applies to the BVA claims. It takes the same position with respect to Northview's BVA claims. In support of its argument for the application of a two-year statute of limitations, Chrysler cites to 42 Pa. Cons.Stat. Ann. § 5524(5) which states that an "action upon a statute for a civil
But Northview persuasively argues that section 5524(5) is not applicable to the BVA because the statute is not penal and instead is remedial. See Appellant Br. at 11-15. While there are not any reported cases addressing the question of whether the BVA is remedial or penal in nature, its language expresses its remedial nature. See Pa. Stat. Ann. tit. 63, § 818.20 (renumbered in 1996 as Pa. Stat. Ann. tit. 63, § 818.29) (providing for the recovery of damages or equitable relief by those injured by the actions of a manufacturer). Moreover, in 1996 the legislature deleted a provision in section 818.20 that had provided for punitive damages in the event of multiple violations on the BVA, and renumbered the section as 818.29. The legislature thus emphasized the Act's remedial rather than penal nature. Further, similar provisions of the ADDCA have been found to be remedial, see Woodard v. General Motors Corp., 298 F.2d 121, 127-28 (5th Cir.1962), as have been like state statutes. See, e.g., American Suzuki Motor Corp. v. Bill Kummer, Inc., 65 F.3d 1381, 1388-89 (7th Cir.1995) (Wisconsin Motor Vehicle Dealer Law is remedial because enacted to protect dealers from unfair and coercive manufacturers); Mike Smith Pontiac, GMC, Inc. v. Mercedes-Benz of North America, Inc., 32 F.3d 528. 531-33 (11th Cir.1994) (Florida Dealer Protection Act is remedial); Earl Evans Chevrolet, Inc. v. General Motors Corp., 74 Ohio App.3d 266, 598 N.E.2d 1187, 1193 (Ohio Ct.App.1991) (Ohio Dealer Act is remedial). Consequently, we conclude that the BVA is remedial rather than penal in nature and, accordingly, section 5524(5) is not applicable to this action.
We are satisfied, however, that section 5524(7) is applicable here. Subsection 7 provides that any action or proceeding "to recover damages for injury to person or property which is founded on negligent, intentional, or otherwise tortious conduct" must be commenced within two years. The BVA provides a cause of action to a franchisee that is injured in his or her business or property by a violation of the Act and Northview brought this action making such claims. See Pa. Stat. Ann. tit. 63, § 8180.20.
The two-year statute of limitations set forth in section 5524(7) has been found to be applicable to other causes of action seeking a statutory remedy for injuries. As we mentioned, Nelson relied upon section 5524(7) in applying a two-year statute of limitations to an action brought under the Pennsylvania statute for a bad faith claim against an insurer. See Nelson, 988 F.Supp. at 534. Further, the two-year statute of limitations period has been held applicable to the Washington Franchise Investment Protection Act. See AAMCO Transmissions, Inc. v. Harris, 759 F.Supp. 1141, 1146 (E.D.Pa.1991) (finding claims for fraud and failure to deal in good faith most analogous to those claims set forth in section 5524(7)). Also, claims of discrimination under the Pennsylvania Human Relations Act are subject to a twoyear statute of limitations under section 5524(7). See Raleigh v. Westinghouse
Counsel for Northview agreed at oral argument that the BVA cause of action accrued, at the latest, when Chrysler sent the original notice of termination of the SSAs in July 1991, which was more than two years before it filed this suit in October 1993. As a result, Northview did not timely file its BVA claims. Accordingly, the district court's dismissal of the claims was proper, though for the alternate reasons we have set forth rather than for those upon which the district court relied.
D. Northview's Breach of Good Faith Claim
The district court granted summary judgment in favor of Chrysler on count four of the complaint after finding that the UCC, as adopted by Pennsylvania, did not create an independent cause of action for breach of an implied covenant of good faith, even though the UCC in 13 Pa. Cons.Stat. Ann. § 1203 provides that "[e]very contract or duty within this title imposes an obligation of good faith in its performance or enforcement."
Courts have utilized the good faith duty as an interpretive tool to determine the parties' justifiable expectations in the context of a breach of contract action, but that duty is not divorced from the specific clauses of the contract and cannot be used to override an express contractual term. See Duquesne Light Co. v. Westinghouse Elec. Corp., 66 F.3d 604, 617-18 (3d Cir. 1995); USX Corp. v. Prime Leasing, Inc., 988 F.2d 433, 438 (3d Cir.1993). Thus, a
In view of these precedents, we believe that if a plaintiff alleging a violation of the implied covenant of good faith also were to file a claim for fraud based on the same set of facts, Pennsylvania courts likely would decline to proceed with the claim alleging bad faith. Instead, Pennsylvania courts would consider the other claims in the plaintiff's complaint. Such an approach limits the use of the bad faith cause of action to those instances where it is essential. The covenant of good faith necessarily is vague and amorphous. Without such judicial limitations in its application, every plaintiff would have an incentive to include bad faith allegations in every contract action. If construed too broadly, the doctrine could become an all-embracing statement of the parties' obligations under contract law, imposing unintended obligations upon parties and destroying the mutual benefits created by legally binding agreements. Therefore, we predict that the Pennsylvania Supreme Court would not extend the limited duty to perform a contract in good faith to a situation such as that presented here in which the parties in great detail set forth their mutual obligations and rights in the SSAs. We are further encouraged to reach this result because Congress in the ADDCA, and the legislature in the BVA, specifically regulated the relationship between automobile dealers and manufacturers. Overall, we are satisfied that, in the face of these detailed provisions setting forth both contractually and statutorily the parties' obligations and rights, we should not recognize an independent cause of action for breach of the implied covenant of good faith in this case.
E. Northview's ADDCA Claim
The ADDCA is a remedial statute enacted to redress the economic imbalance and unequal bargaining power between large automobile manufacturers and local dealerships, protecting dealers from unfair termination and other retaliatory and coercive practices. See, e.g., Maschio v. Prestige Motors, 37 F.3d 908, 910 (3d Cir.1994); Hanley v. Chrysler Motors Corp., 433 F.2d 708, 710-11 (10th Cir. 1970). It is, essentially, a supplement to the national antitrust laws, passed to counter-balance the economic leverage a manufacturer has over its ostensibly independent dealers, and its "control over [its] product in what amounts to quasi-integration
It is axiomatic that any inquiry as to the meaning of a statute must begin with its language. The Act defines the term "good faith" as "the duty of each party to any franchise ... to act in a fair and equitable manner toward each other so as to guarantee the one party freedom from coercion, intimidation, or threats of coercion or intimidation from the other party...." 15 U.S.C. § 1221(e). The Act, however, does not protect dealers against all unfair practices, but only against those breaches of good faith "evidenced by acts of coercion or intimidation." Salco Corp. v. General Motors Corp., 517 F.2d 567, 573 (10th Cir.1975). The case law plainly requires actual, or threatened, coercion or intimidation as an element of an ADDCA claim. See General GMC, Inc. v. Volvo White Truck Corp., 918 F.2d 306, 308 (1st Cir.1990); Arnold Pontiac-GMC, Inc. v. General Motors Corp., 786 F.2d 564, 575 (3d Cir.1986); Bob Maxfield, Inc. v. American Motors Corp., 637 F.2d 1033, 1038 (5th Cir.1981). Consequently, it is well established that the duty of "good faith" dealing imposed by the Act must be given a narrow, rather than expansive, construction. See Autohaus Brugger, Inc. v. Saab Motors, Inc., 567 F.2d 901, 911 (9th Cir. 1978); Milos v. Ford Motor Co., 317 F.2d 712, 715-16 (3d Cir.1963). For example, when assessing the elements of a claim under section 1221(e), the Court of Appeals for the Ninth Circuit noted that:
Autohaus Brugger, 567 F.2d at 911 (citations omitted).
The case law interpreting the ADDCA provides some guidelines for determining whether a manufacturer has been guilty of coercion or intimidation. Thus, a manufacturer's coercion of a dealer into relinquishing the right to sell competing car lines may be actionable, at least if the dealer's franchise agreement gives it the right to make such sales. See, e.g., Cabriolet Porsche Audi, Inc. v. American Honda Motor Co., 773 F.2d 1193, 1210 (11th Cir. 1985) ("We have little doubt that had Honda threatened to deny Cabriolet ... cars to which it was entitled, unless Cabriolet provided an exclusive facility, this would be evidence of coercion"); Rea v. Ford Motor Co., 497 F.2d 577, 582-87 (3d Cir. 1974). Similarly, a manufacturer's efforts to drive a dealer out of business can qualify as bad faith. See Junikki Imports, Inc. v. Toyota Motor Co., 335 F.Supp. 593, 595 (N.D.Ill.1971); see also Randy's Studebaker Sales, Inc. v. Nissan Motor Corp., 533 F.2d 510, 516 (10th Cir.1976). Also, an automobile manufacturer's coercive attempt to force unwanted automobiles on a dealer constitutes "bad faith." See David R. McGeorge Car Co. v. Leyland Motor
On the other hand, if an ADDCA defendant has objectively valid reasons for terminating its relations with a dealer, the dealer cannot prevail in an ADDCA action absent evidence that the defendant had an ulterior motive for its action. See Carroll Kenworth Truck Sales, Inc. v. Kenworth Truck Co., 781 F.2d 1520, 1527 & n. 4 (11th Cir.1986); see also York Chrysler-Plymouth, Inc. v. Chrysler Credit Corp., 447 F.2d 786, 791-92 (5th Cir.1971) ("[T]hat Chrysler Motors may have had grounds for lawful termination of the automobile dealership does not permit this court to set aside a jury verdict.... The [ADDCA] is not as concerned with what the parties did as it is concerned with why they did it.").
Our review of the district court's decision on Chrysler's Rule 50 motion of necessity is affected by the court's earlier ruling concerning the statute of limitations and its repeated decisions to admit certain evidence only as proof of motive or intent. As noted, the district court concluded that the statute of limitations barred allegations premised upon Chrysler forcing Northview to take delivery of cars that it did not need and forcing it to join an advertising campaign. The court also prevented Northview from proffering evidence of Chrysler's failure to provide vehicles and parts, the performance of the warranty audit and the failure to provide proper training as direct evidence for a basis for Northview recovering damages. See id. at 24-26. As a result, the court admitted evidence of such "coercive" activity only to demonstrate motive or intent— i.e., that Chrysler's July 1991 termination of the SSAs was motivated by its desire to force Northview out of business in furtherance of Chrysler's business plan to eliminate stand alone dealers.
The more direct evidence that Northview offered at trial supporting this theory concerned the fact that the SSAs were terminated in July 1991 and that certain other stand alone Jeep and Eagle Dealerships were closed and then re-opened after having been combined with other Chrysler dealerships. From this evidence, Northview argues that a reasonable jury could have concluded that Chrysler coerced or intimidated it into closing its dealership so that Chrysler could pair the dealership with another of its vehicle brands.
At argument before us, counsel for Northview confirmed that he did not challenge the ADDCA statute of limitations and evidentiary rulings of the district court.
While evidence of improper motive may be sufficient in certain franchise terminations cases to create a jury question, see Carroll Kenworth Truck Sales, 781 F.2d at 1527 & n. 4; York Chrysler-Plymouth, 447 F.2d at 791-92, the evidence presented here was wholly insufficient to raise an inference that Chrysler was motivated by a desire to close Northview as part of a plan to phase out stand alone Jeep and Eagle dealerships. The theory of Northview's case appears to rest upon the existence of what has been termed Plan 2000. Northview was not allowed to reference Plan 2000 by name at the trial because it did not come into existence until after Northview's SSAs were terminated. See app. at 68, 164-65. Northview argues, however, that the plan was in place before its formal adoption and operated to eliminate stand alone Jeep and Eagle dealerships like Northview and replace them with dealerships selling both Jeeps and Eagles and other Chrysler lines such as Dodge or Plymouth.
In support of its Plan 2000 theory, Northview presented evidence of a number of stand alone Jeep and Eagle dealerships that were closed only to have been reopened later at nearby dealerships of other Chrysler lines. See, e.g., app. at 550-54 (listing 6 Jeep and Eagle dealerships, of over 50 in its region, that were closed and combined with another Chrysler brand). There is noticeably absent from the evidence Northview presented, however, any evidence that Chrysler forced these Jeep and Eagle dealerships to close, that the closed dealerships suffered difficulties similar to Northview, or that the closing and later reopening of the dealerships was not a beneficial change for the parties involved. Northview asserts that a reasonable inference to be drawn from evidence of the mere closing of certain Jeep and Eagle dealerships is that Chrysler was motivated to bring about the wrongful termination of all stand alone Jeep and Eagle dealerships such as Northview. Based upon the evidence presented, however, this is not a reasonable inference from the evidence but instead is a leap of faith. As mentioned, there was no evidence presented to suggest any connection between the closings or to suggest that the closings resulted from coercion on the part of Chrysler.
As argued by Chrysler:
Appellee Br. at 36. Chrysler is correct on this point; Northview did not present evidence of any dealership "falling prey" to the alleged marketing plan. In the absence of such evidence, or at least some evidence that the dealership closings that were proffered were not desired by the owners and were connected in some manner, Northview is not entitled to the inference it desires, namely that since 1987 Chrysler was operating under a plan to close all stand alone Jeep and Eagle dealerships. No reasonable jury could draw this inference from the facts presented at trial.
As mentioned, the ADDCA does not protect dealers against all unfair practices, but only against those "evidenced by acts of coercion or intimidation." Salco Corp. v. General Motors Corp., 517 F.2d at 573. The case law plainly requires a plaintiff to
In addition, the other evidence of wrongful intent proffered by Northview was insufficient to create a question for the jury. For example, Northview presented evidence that Chrysler did not provide the dealership with sufficient numbers of the more desirable and faster selling models of the Jeep Cherokee. The evidence offered, however, demonstrated that dealers across the country were experiencing similar problems. See exhs. at 1-2, 3, 4. Northview did not offer evidence that it suffered shortages different than those of any other dealer. Thus, in the absence of evidence of discriminatory treatment, no jury reasonably could have concluded that Chrysler was motivated by its desire to close the Northview dealership in its allocation decisions and thus was coercing Northview by injuring it financially.
Further, despite arguing that it was forced to order unwanted vehicles, Northview did not present any evidence of specific unwanted vehicles that Chrysler forced it to order. Rather, Northview presented evidence that Chrysler recommended that Northview order the mix of vehicles that Chrysler was producing in order to receive its full allocation of vehicles. See app. at 292. From this evidence, Northview argues that Chrysler was attempting to coerce the dealership into ordering unwanted vehicles. The only fair reading of the evidence, however, is that Chrysler was suggesting that Northview order the mix of vehicles so that it could be guaranteed to receive more vehicles. There was nothing preventing Northview from ordering a greater number of more desirable vehicles than it was allocated, but it would have had to wait for other dealers' allocations to be met first and then have its excess orders satisfied by any surplus. See app. at 809-10. No reasonable jury could have concluded that such actions were coercive within the meaning of the ADDCA. See, e.g., Colonial Dodge, Inc. v. Chrysler Corp., 11 F.Supp.2d 737, 744 (D.Md.1996) (granting summary judgment in favor of manufacturer upon finding that under ADDCA dealer is entitled only to cars due under allocation system, not to all the automobiles it requests).
Also, the evidence presented at trial merely demonstrated that Chrysler, on occasion, either urged or recommended that Northview order, stock, and sell all models of all vehicle lines. The SSAs, however, obligated Northview to market and sell all Jeep and Eagle models energetically and aggressively. See exhs. at 152. In addition, neither the recommendations of a manufacturer nor the actual solicitation of
We recognize that Northview presented evidence that Chrysler failed to explain properly its warranty reimbursement system and the EPUR. See app. at 313-14, 332. Again, this problem was one that dealers suffered universally. See id. at 315. The evidence presented could not provide a foundation for a conclusion that Chrysler subjected Northview to discriminatory treatment, i.e., that Chrysler singled it out for warranty audits or that stand alone dealerships in particular were subjected to the audits. Moreover, Northview's evidence did not permit a finding that: (1) the warranty audit was not warranted; (2) its placement on a more restrictive warranty approval system was not appropriate under the circumstances; or (3) the audit or Northview's placement on the more restrictive approval system interfered in any way with its ability to operate the dealership profitably. In the absence of sufficient evidence to support these conclusions, it would be unreasonable for a jury to infer that Chrysler used the warranty audit as a means of coercing Northview to relinquish its franchise.
Northview suggests that, when viewing the evidence, a reasonable jury could have concluded that Chrysler, by its actions and omissions, made it impossible for Northview to operate profitably. Acceptance of this argument, however, would require viewing evidence concerning vehicle ordering and supply, warranty audits, and animosity as substantive evidence to support a damages recovery. As mentioned, Northview was prevented from proffering such evidence for that purpose and has not raised any argument here to suggest that the court's limitation was erroneous. Accordingly, Northview is not entitled to the inference it desires. Moreover, the evidence could not support an inference of coercion or intimidation as is required by the ADDCA.
As a final matter, we note that the SSAs were terminated by operation of section 28, which states that the failure of a dealership to operate its business for seven consecutive business days automatically terminates the SSAs without notice. See exhs. at 162. Thus, notwithstanding Chrysler's having mailed Northview a notice of termination in July 1991, in light of our analysis of the evidence we are satisfied that a reasonable jury could not have concluded that the termination of the SSAs pursuant to section 28 supports a cause of action under the ADDCA. See, e.g., Dick Winning Chrysler-Plymouth of Ft. Myers, Inc. v. Chrysler Motors Corp., 750 F.2d 895, 899-900 (11th Cir.1985) (no violation of ADDCA where franchise termination was in accordance with express terms of agreement); Globe Motors, Inc. v. Studebaker-Packard Corp., 328 F.2d 645, 648-49 (3d Cir.1964). Overall, we are satisfied that the district court properly granted Chrysler's motion for judgment as a matter of law, even when we exercise the generous standard of review owed to Northview on its appeal from the judgment entered pursuant to Rule 50(a).
IV. CONCLUSION
For the reasons set forth above, we affirm the March 7, 1995 and February 9, 1996 orders of the district court granting summary judgment in favor of Chrysler as to Northview's BVA and UCC good faith
FootNotes
Interestingly, even though Chrysler prevailed, it challenges the admission of the motive or intent evidence. While Chrysler's argument along these lines is substantial, see Becker v. ARCO Chemical Co., 207 F.3d 176 (3d Cir.2000), we will assume without deciding that the district court properly admitted the evidence as bearing on Chrysler's motive or intent. Thus, in considering Northview's appeal from the order granting Chrysler judgment as a matter of law, we are considering the Rule 404(b) evidence. Accordingly, we are not following our long-standing practice, see Lightning Lube v. Witco, 4 F.3d at 1198-1200, approved by the Supreme Court in Weisgram v. Marley Co., 528 U.S. 440, 120 S.Ct. 1011, 1019-22, 145 L.Ed.2d 958 (2000), of considering an appeal from an order granting a judgment as a matter of law only on the basis of evidence we determine was admitted properly.
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