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January 7, 1958

M. O. ANDERSON, A.B.C. Packard, Inc., a Washington Corporation, Plaintiffs,
GENERAL MOTORS CORPORATION, a Delaware corporation, Defendant

The opinion of the court was delivered by: RYAN

Plaintiff, A.B.C. Packard, Inc., has moved under Rule 59, F.R.C.P., 28 U.S.C.A., and Local Rule 48, to set aside the verdict of the jury returned on August 28, 1957 and the judgment entered thereon on August 29, 1957 and to grant a new trial. The trial commenced on August 1, 1957 and continued through August 28, 1957 when the jury returned a special verdict and a general verdict for the defendant.

This suit followed the termination on June 30, 1953 of a Buick automobile distributor dealer relationship covering specific areas and counties in Washington and Alaska which had existed since 1936, first between the individual plaintiff, M. O. Anderson, and thereafter corporations organized by him, and the defendant General Motors Corporation, operating through its Buick Motor Division. The distributor dealer contracts had been made annually since March 30, 1942 to the date of termination with Anderson Buick Company, a Washington corporation, the present corporate name of which is A.B.C. Packard, Inc. M. O. Anderson, throughout the entire period since 1936, had been the directing and managing head of this business. General Motors, on June 30, 1953, took over the distribution of its Buick automobiles in the northwest, including the area previously covered by the Anderson contracts, and has since operated there on a factory zone basis of direct distribution to dealers. The Anderson corporation was offered and refused to accept a retail dealership.

 Suit was filed in July, 1955. Jurisdiction is predicated upon diversity in citizenship. The original complaint alleged four separate counts. When the suit was called for trial, an amended complaint alleged three counts. Construed liberally, the first count alleged a claim for breach of contract based on an estoppel claimed to have arisen out of alleged oral representations and promises; the second count alleged a claim, sounding in tort, for fraud based on the same alleged oral representations and promises; and the third count attempted to plead a claim for alleged misappropriation by defendant of plaintiff's business good will. Issue was joined by answer which was, in effect, a general denial of the fraud alleged, of the alleged oral misrepresentations and promises, and of consequent damage, and there were pleaded five affirmative defenses, namely, failure to state a claim upon which relief can be granted, the statute of frauds, the statute of limitations, laches and waiver.

 Permission was granted the plaintiff to serve, during the trial, a further amended complaint which alleged only two claims, sounding in fraud. It was so served and answer made thereto.

 'The theories supporting recovery are: first, fraud arising out of the breach of a duty to disclose a plan to terminate plaintiff's business, as well as fraud in the more familiar sense of actionable misrepresentation and promise made with no intention to perform, and secondly, promissory and equitable estoppel, operating against the defendant, to terminate plaintiff's business.'

 And this, plaintiff followed with a further statement that plaintiff's claims were not dependent

 '* * * upon the suggestion, that General Motors did not have the legal right to change its distribution pattern * * * it is not deemed actionable and this case is not grounded upon the termination alone. It is recognized that General Motors may distribute its products as it sees fit so long as its policies do not conflict with the public interest.'

 Plaintiff's counsel, in his opening statement to the jury, elaborating on the nature of plaintiff's claims, stated:

 'Now, this is an action by Anderson claiming a wrongful termination of the distributor-dealership relationship that existed from June 1, 1936 to June 30, 1953. The action is predicated upon a charge of wrongful termination, and the wrongful termination consists of termination after making of misrepresentations concerning the permanency of the distributorship, misrepresentations upon which Anderson relied, and when June 30, 1953 came around and the distributorship was terminated, Anderson was damaged very substantially' (S.M. 71).

 The Court, in its charge and in language to which no objection was made or exception taken, advised the jury that plaintiff, A.B.C. Packard, Incorporated

 'seeks a verdict for damages which it alleges it sustained and suffered by reason of the wrongful and fraudulent acts of the defendant, General Motors, acting through its officers, agents and employees.'

 and that

 'In brief, the frauds which the plaintiff alleges consist of a non-disclosure of a policy of General Motors as to the continuance of a distributorship franchise, and a false and fraudulent representation concerning the defendant's then existing intention and policy as to the continuance of a distributorship franchise which the plaintiff had for the marketing of the Buick automobiles, parts and accessories' (S.M. 2622).

 The jury was also charged that

 'General Motors denies that it unlawfully damaged or wrongfully and fraudulently injured the plaintiff in any manner' (S.M. 2622).

 The suit, with the service of the amended complaint during trial, became one in which two claims founded in fraud and not in contract were asserted. The trial was had on this theory of plaintiff's claims and they were so submitted to the jury. Without objection or exception, the Court charged:

 'that General Motors was under no contractual obligation to continue the Distributor or Dealer Franchise which it had granted the Anderson Buick Company beyond June 30, 1953, the date on which it ended' (S.M. 2636).

 and further that

 'Recovery, if any is to be had by the plaintiff, therefore, must be predicated not upon the breach of a contractual obligation but solely for a wrong or a violation of a legal right which did not arise from a contract -- that is in plain language from a fraud and deceit.' (S.M. 2636).

 Specifically, and again without objection r exception, the jury were instructed that

 The affirmative misrepresentations alleged in the final complaint were orally made and were never reduced to a writing. They were two in number. The first, it was claimed, was made in a telephone conversation around the middle of July, 1947 by Jerome B. Nash, then the Buick Division, Regional Manager of the Pacific Coast area to Anderson. The details of this conversation were given by Anderson (S.M. 545) and by Nash (S.M. 2085). An analysis of the testimony as to this conversation was given to the jury in the charge (S.M. 2639). There was a sharp conflict in this testimony.

 The conversation centered, according to Anderson's testimony, upon the discontinuance by Buick of the Howard distributorship in California and its bearing upon a possible termination of the Anderson distributorship in Washington -- as to this Anderson testified that Nash had said:

 'You are doing the job, and I don't think you should get excited at all about it, and you don't have anything at all to worry about as long as you are doing a job' (S.M. 546).

 As to this alleged misrepresentation, it was charged that the jury might and should consider the 'evidence as to the alleged incident of July, 1947, as well as all the evidence, in determining what occurred and what was said on November 9, 1951 and the purpose with which the parties acted and spoke on that day' (S.M. 2649).

 It was ruled upon the trial that recovery might not be had by reason of the misrepresentation alleged to have been made in July, 1947.

 Plaintiff's claim, insofar as it is bottomed upon an alleged affirmative misrepresentation, rested solely on a second statement alleged to have been made on November 9, 1951 by Nash to Anderson.

 Here, it is well to note, as the Court charged, that

 'The misrepresentation alleged in the complaint to have been made on November 9, 1951 is a statement that there was no intention on the part of General Motors to terminate the distributor and dealer franchises of the Anderson Buick Company so long as it continued to penetrate the market and maintain price class performance and for at least so long a period as the Anderson Buick Company required to amortize the $ 500,000.00 mortgage it was about to make' (S.M. 2650).

 It was plaintiff's claim that this statement was false in that it was not a true and honest statement of the then present and existing policy and intention of the defendant, General Motors.

 Anderson's version of this conversation with Nash was given in great detail by him (S.M. p. 709-715); and Nash's version was also before the jury (p. 2091-2094). Again, the testimony presented a sharp conflict; a question of veracity was presented for jury determination. Plaintiff's counsel, in his summation, thus referred to it:

 'This is the conflict in testimony. Now in resolving this conflict, and, of course, it is your task to resolve the conflict, you are entitled to all the help you can get from your own experience in this Court and out of it. You can look at other uncontradicted evidence which bears on this conversation. You can appraise the witnesses and you can ask yourselves was Mr. Nash a truthful witness? Which of these two witnesses am I inclined to believe? You can ask yourselves which in logic and reason probably happened and which story is more consistent with logic and with reason' (S.M. 2488).

 The jury answered these rhetorical questions of counsel by their verdict; they rejected the testimony of Anderson and accepted the testimony of Nash.

 In the second count of the complaint, as amended, the plaintiff alleged 'that in the period from 1937-1941 the defendant, General Motors, formulated and adopted a policy to terminate the distributorship of the plaintiff, Anderson Buick Company, after the plaintiff had developed the market for Buick automobiles, parts and accessories in the territory assigned to it where it would be more profitable for General Motors itself to distribute; that General Motors thereafter did not disclose this plan to the Anderson Buick Company and did conceal it from

 'that company notwithstanding the relationship of the parties which is alleged to have been of such a nature as to require disclosure' ...

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