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MCDANIEL v. GMC

November 13, 1979

C. RICHARD McDANIEL, JIM FALLON OLDSMOBILE, INC., and ETHEL NEWFIELD, Successor Assignee to SAMUEL NEWFIELD, Deceased, Assignee for the Benefit of Creditors of JIM FALLON OLDSMOBILE, INC., Plaintiffs against GENERAL MOTORS CORPORATION, DAVID L. NEISCH, JOSEPH FOX and MERRY OLDSMOBILE, INC., Defendants.


The opinion of the court was delivered by: NEAHER

MEMORANDUM AND ORDER

Plaintiffs in this private antitrust action are a former franchised Oldsmobile dealership located in Bethpage, Long Island ("Fallon"); C. Richard McDaniel, an unsuccessful applicant to succeed Fallon in Bethpage; and Ethel Newfield, the successor assignee for the benefit of the creditors of Fallon. The defendants are General Motors Corporation ("G.M."); David L. Neisch, the New York Zone Manager of G.M."s Oldsmobile Division during the period in suit; Merry Oldsmobile, Inc. ("Merry"), the successor to Fallon in Bethpage; and Merry's dealer operator, Joseph Fox, against whom are alleged twelve causes of action, five of which assert violations of federal law. Two such counts charge G.M. with restraint of trade in violation of sections 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1, 2; one charges G.M. with attempt to monopolize and monopolization; one asserts that all defendants conspired to restrain trade in violation of section 1 of the Sherman Act; and the remaining federal cause of action alleges acts in violation of the Dealer-Day-in-Court Act, 15 U.S.C. § 1221 Et seq. Plaintiffs' other claims are governed by State law. After extensive discovery, the action is now before the court on defendants' motion for summary judgment pursuant to Rule 56, F.R.Civ.P.

 Summary judgment may be rendered only "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Rule 56(c), F.R.Civ.P. Pursuant to the 1963 amendments, Rule 56(e) provides that when a motion for summary judgment is supported by proper affidavits (or by the other materials referred to in Rule 56(c)), "an adverse party may not rest upon the mere allegations or denials of his pleading, but his response, by affidavits or as otherwise provided in this rule, must set forth specific facts showing that there is a genuine issue for trial." As the Court of Appeals for this circuit recently stated, once the movant has made the requisite showing,

 
"an adverse party may not rest upon mere conclusory allegations or denials. The party opposing the motion must set forth "concrete particulars,' Dressler v. The MV Sandpiper, 331 F.2d 130, 133 (2d Cir. 1964), and cannot make a secret of his evidence, holding it close to his chest until the trial. See Donnelly v. Guion, 467 F.2d 290, 291 (2d Cir. 1972). It is not sufficient merely to assert a conclusion without supplying supporting arguments or facts in opposition to the motion. Id. at 293. See Applegate v. Top Associates, Inc., 425 F.2d 92, 96 (2d Cir. 1970)." Securities Exchange Commission v. Research Automation Corp., 585 F.2d 31, 33 (2 Cir. 1978).

 In determining whether to grant a motion for summary judgment, the court "cannot try issues of fact; it can only determine whether there are issues to be tried." American Mfrs. Mut. Ins. Co. v. American Broadcasting-Paramount Theatres, Inc., 388 F.2d 272, 279 (2 Cir. 1967), Quoted in Securities Exchange Commission v. Research Automation Corp., supra, 585 F.2d at 33. It must accept as true factual statements in the opposing party's affidavits, draw all permissible inferences in that party's favor, Hill v. A-T-O, Inc., 535 F.2d 1349 (2 Cir. 1976), and resolve any doubts in favor of the latter, American Mfrs. Mut. Ins. Co. v. American Broadcasting-Paramount Theatres, Inc., supra. It is true, moreover, that summary judgment should be used sparingly in the context of antitrust actions, Poller v. Columbia Broadcasting System, Inc., 368 U.S. 464, 82 S. Ct. 486, 7 L. Ed. 2d 458 (1962), and should be granted only after affording plaintiffs ample opportunity for discovery, Hospital Building Co. v. Trustees of Rex Hospital, 425 U.S. 738, 96 S. Ct. 1848, 48 L. Ed. 2d 338 (1976).

 "The very mission of the summary judgment procedure (however) is to pierce the pleadings and to assess the proof in order to see whether there is a genuine need for trial." Adv. Com. Note to Proposed Amendments to Rule 56(e), 31 F.R.D. 648 (1962). See generally Applegate v. Top Associates, Inc., supra; Donnelly v. Guion, supra, 467 F.2d at 292. Hence, a party may not retreat to "the mere allegations or denials of his pleading" in face of "a motion for summary judgment made and Supported as provided in . . . (Rule 56)." Rule 56(e), F.R.Civ.P. (emphasis supplied). See generally Aladdin Oil Co. v. Texaco, Inc., 603 F.2d 1107 (5 Cir. 1979); Lupia v. Stella D'Oro Biscuit Co., Inc., 586 F.2d 1163, 1167 (7 Cir. 1978), Cited in Ambook Enterprises v. Time Inc., 612 F.2d 604, 621-623 (2 Cir., 1979) (Moore, J., dissenting).

 With these principles in mind, it is the court's view that summary judgment on the antitrust claims is appropriate. The facts in this case have been fully developed through more than six years of discovery proceedings, and the issues that bear on the resolution of the antitrust claims are not the subject of conflicting affidavits. Since there are no genuine issues of material fact concerning our resolution of those claims and the law supports defendants' position, they are ripe for decision in defendants' favor.

 Background

 On December 5, 1969, Fallon, with its dealer operator James Fallon, was appointed as the Oldsmobile dealership at Bethpage, Long Island. The relationship between the Oldsmobile Division and Fallon was governed by the Oldsmobile Dealer Sales and Service Agreement ("Agreement") which became effective November 1, 1970. While in no way restricting a dealership's ability to dispose of its assets, the Agreement expressly reserved to the Oldsmobile Division the right to grant or confer franchise rights and privileges:

 
"In view of the nature, purposes and objectives of an Oldsmobile Dealer Sales and Service Agreement, Oldsmobile expressly reserves to itself its right to grant or confer franchise rights and privileges covering the sale and service of Oldsmobile motor vehicles upon, and its freedom to contract through its execution of Dealer Sales and Service Agreements with, dealership entities selected and approved by Oldsmobile.
 
"Accordingly, this Agreement and the franchise rights and privileges conferred upon Dealer hereunder are not transferable, assignable, or salable by Dealer, and no property right or interest, direct or indirect, in this Agreement or such franchise rights and privileges is sold, conveyed or transferred by Oldsmobile to Dealer hereunder.
 
"Dealer shall not transfer or assign or attempt to transfer or assign any other right or transfer or delegate any obligation or responsibility of Dealer under this Agreement unless it shall have been approved in writing by Oldsmobile." (Agreement, Paragraph Second.)

 Thus, under the Agreement, the right to use Oldsmobile trademarks and service marks is not subject to unilateral transfer by the franchisee.

 Paragraph Third of the Agreement states that:

 
"This Agreement is a personal service contract and is entered into by Oldsmobile with Dealer in reliance upon and in consideration of the personal qualifications, and the representations made to Oldsmobile with respect thereto, of the following named person or persons who, it is agreed, will substantially participate, both of record and beneficially, in the ownership of dealer (hereinafter called Owner or Owners) and/or will actively manage the Dealership Operations (hereinafter called Dealer Operator or Operators):
 
"For the purpose of this Agreement the person or persons designated above shall be responsible for any act or omission of any of Dealer's agents or employes which may be contrary to the purposes and objectives of this Agreement or to any provision of this Agreement.
 
"Concurrently with the execution of this Agreement, Oldsmobile has endorsed its approval of the ownership, financial interests and active management of Dealer as represented by Dealer on a "Dealer Statement of Ownership, Financial Interests and Active Management' form supplied by Oldsmobile. No change in such ownership, financial interests or active management of Dealer shall be made without the prior written approval of Oldsmobile. Any such approved change shall be evidenced by the execution of a new "Dealer Statement of Ownership, Financial Interests and Active Management'."

 And Sections 11(B)(2) and (4) of "Additional Provisions Applicable to the Agreement," which are incorporated by reference, provide that the Agreement may be terminated for such acts or events as the following:

 
"(2) Any misrepresentation to Oldsmobile by Dealer or by any other person named in Paragraph THIRD hereof in applying for this agreement or any misrepresentation to Oldsmobile by Dealer or any such person as to the record or beneficial ownership or as to the management of Dealer.
 
"(4) Any sale, transfer, relinquishment, voluntary or involuntary, by operation of law or otherwise, of any interest in the record or beneficial ownership of Dealer or any transfer or relinquishment of or change in the active management of Dealer, without the ...

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