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November 10, 1982


The opinion of the court was delivered by: Bua, District Judge.


This case involves claims arising under the Automobile Dealer's Day in Court Act, 15 U.S.C. § 1221 et seq. (1976) (Counts I & II), the Clayton Act, 15 U.S.C. § 12 et seq. (1976) (Count VII), and the Robinson-Patman Price Discrimination Act, 15 U.S.C. § 13 (1976) (Count VIII). The complaint also contains state law claims for breach of contract (Count III), misrepresentation (Count IV), breach of fiduciary duty (Count V) and civil conspiracy (Count VI). Various defendants*fn1 have moved under Fed.R. Civ.P. 12(b)(6) for dismissal of parts of Counts I & II and all of Counts V and VI.

In Counts I & II, Plaintiff DeValk Lincoln Mercury, a corporate automobile dealership and Plaintiffs Harold DeValk and John Fitzgerald, owners of the dealership stock, complain that Ford Motor Company (Counts I and II), Ford Motor Credit Company and Ford Leasing Development Company (Count II) violated the Dealer's Day in Court Act (the "Act"). The Act authorizes suits by an automobile dealer against an automobile manufacturer for the failure of the manufacturer to act in good faith in performing or complying with terms or provisions of their franchise agreement, or in terminating, canceling or not renewing the franchise.

Defendants have cited various cases which they claim support their motion. This Court disagrees. In each case cited by defendants and similar cases, individual plaintiffs were dismissed in response to a motion for summary judgment under Fed. R.Civ.P. 56 or upon review of a full evidentiary record.*fn3 Thus, the court was able to consider affidavits, depositions and other evidentiary material in determining whether the individual plaintiff fell within the statutory definition of "dealer." In the instant case, on the other hand, this Court has before it only the pleadings of the parties, making dismissal of the individual plaintiffs' claims improper. Lewis v. Chrysler Motors Corp., 456 F.2d 605, 606-607 (8th Cir. 1972); Schmitt-Norton Ford, Inc. v. Ford Motor Co., 524 F. Supp. 1099, 1107 (D.Minn. 1981); accord, Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 101-102, 2 L.Ed.2d 80 (1957). For this reason, the motion to dismiss the claims of plaintiffs Harold DeValk and John Fitzgerald from Counts I and II is denied.

In addition to joining the latter motion, Defendant Ford Motor Credit Company (Ford Credit) seeks to be dismissed from Count II of the complaint as to all plaintiffs. Ford Credit contends that § 1222 of the Act authorizes suits only against an automobile "manufacturer" and that Ford Credit is not a manufacturer within the meaning of the Act.

The term manufacturer is defined in § 1221(a) of the Act as:

  [A]ny person, partnership, corporation, association, or other
  form of business enterprise engaged in the manufacturing or
  assembling of passenger cars . . . including any person,
  partnership, or corporation which acts for and is under the
  control of such manufacturer or assembler in connection with
  the distribution of said automotive vehicles.

The definition is a broad one, and cases interpreting it have properly recognized that there exist situations in which one not a manufacturer in the traditional sense may nonetheless fall within its scope. For example, if a nonmanufacturer is but an "instrumentality" of the manufacturer, in the sense that "instrumentality" is used in corporation law, that entity may properly be sued under the Act. Volkswagen Interamericana, S.A., v. Rohlsen, 360 F.2d 437, 441-442 (1st Cir. 1966). Similarly, applying general agency principles, if a nonmanufacturer is subject to the manufacturer's control or right to control, a suit against the nonmanufacturer may proceed. Id.*fn4 The rationale for construing § 1221(a) to encompass nontraditional manufacturers is that such an approach is necessary to enforce the broad remedial purposes of the Act. The Act was designed to curtail coercion and intimidation of retail dealers by manufacturers made possible because of the parties' economic inequality. See Colonial Ford, Inc. v. Ford Motor Co., 592 F.2d 1126, 1129 (10th Cir. 1979). This goal easily could be thwarted, however, by manufacturers who transacted business through alter-egos, agents or wholly owned subsidiaries. In order to avoid such a result, the possibility must exist that nontraditional manufacturers may be found to fall within § 1221(a). See Volkswagen Interamericana, S.A., 360 F.2d at 441; Colonial Ford, Inc., 592 F.2d at 1129.

In the instant case, the plaintiff alleges that Ford Credit provided financing to facilitate the sale of Ford manufactured vehicles through plaintiff's dealership. This assertion (which must be assumed to be true at this stage of the proceedings) and the reasonable inferences to which it gives rise, are sufficient to state a claim against Ford Credit. The allegations indicate, at the least, possible proof of an agency relationship between Ford Motor Company, the manufacturer, and Ford Credit, the defendant, in the distribution of Ford manufactured vehicles.

Ford Credit next contends that even if it is a manufacturer within the meaning of the Act, it cannot be subjected to liability because it is not a signatory to the written franchise agreement and, in this circuit, only a signatory may be held liable under the Act. Ford Credit cites Lawrence Chrysler Plymouth, Inc. v. Chrysler Corp., 461 F.2d 608 (7th Cir.), cert. denied, 409 U.S. 981, 93 S.Ct. 317, 34 L.Ed.2d 245 (1972), in support of its contention.

This Court does not agree with Ford Credit's reading of the case law. In Lawrence, the Seventh Circuit did not find that a nonsignatory to a franchise agreement may never be found liable under the Act. Rather, the Court adopted the reasoning of York Chrysler-Plymouth, Inc. v. Chrysler Credit Corp., 447 F.2d 786 (5th Cir. 1971) wherein a suit was permitted against a nonparty to the franchise agreement. The Fifth Circuit refused to impose liability primarily because, in analyzing the evidence regarding the relationship between Chrysler Corporation and Chrysler Motors, the two relevant parties, the Court found that there was "no showing that would make either responsible for the acts of the other on an agency theory." In light of this and the fact that, by all indications, the two parties were "separate legal entities each operating in its own sphere," the Court concluded that "only the one which has entered into a franchise agreement could be held accountable for performing or complying with it." Id. at 613. See also Marquis v. Chrysler Corp., 577 F.2d 624, 630 (9th Cir. 1978) citing Stansifer v. Chrysler Motors Corp., 487 F.2d 59, 64 (9th Cir. 1973) (manufacturer may be liable even if nonparty to franchise only upon showing that party contracting with dealer is agent of manufacturer of "straw man" erected to insulate manufacturer from liability); Evanston Motor Co., Inc. v. Mid-Southern Toyota, 436 F. Supp. 1370 (N.D.Ill. 1977) (importer, a nonsignatory to franchise agreement, is liable only if evidence indicates that importer had actual or apparent authority under agency theory to bind manufacturer or was alter ego of manufacturer).

Thus Lawrence and the above-cited cases do not prevent liability from being imposed on Ford Credit simply because it was not a signatory to the franchise agreement. The case law simply sets forth the proof required for a finding of liability against such a party. Therefore, defendant Ford Credit cannot support its motion to dismiss Count II on the above-mentioned grounds.

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