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Empire Volkswagen v. World-Wide Volkswagen Corp.

decided: March 12, 1987.

EMPIRE VOLKSWAGEN INC., EMPIRE VOLKSWAGEN INC. D/B/A/ EMPIRE PORSCHE/AUDI INC., EMPIRE CITY MOTORS INC., DONALD AMERLING AND SUSANNE PROPERTIES CORP., PLAINTIFFS-APPELLANTS,
v.
WORLD-WIDE VOLKSWAGEN CORP., DEFENDANT-APPELLEE



Appeal from a judgment entered in the United States District Court for the Southern District of New York (Kram, J.) in favor of defendant. After granting partial summary judgment dismissing certain Automobile Dealers' Day in Court Act claims as well as all antitrust claims asserted by appellants, the district court granted appellant's motion for voluntary dismissal of the remaining claims pleaded in the complaint.

Feinberg, Chief Judge, Newman and Miner, Circuit Judges.

Author: Miner

MINER, Circuit Judge:

Plaintiffs-appellants Empire Volkswagen, Inc., Empire City Motors, Inc. and Suzanne Properties companies formerly associated with Volkswagen-Porsche-Audi and Ford dealerships in Poughkeepsie, New York, and Donald Amerling, principal owner of those companies, appeal from a judgment entered in the United States District Court for the Southern District of New York (Kram, J.) in favor of defendant-appellee World-Wide Volkswagen, Inc. ("World-Wide"). Appellants' complaint asserted federal Automobile Dealers' Day in Court Act ("Dealers' Act") claims, see 15 U.S.C. ยง 1221 et seq. (1982), federal and state antitrust claims, and various pendent state law claims. World-Wide asserted various counterclaims.

In an amended order dated February 27, 1986, Judge Kram granted summary judgment dismissing appellants' federal and state antitrust claims. She held that only Empire Volkswagen had standing to assert a claim under the Dealers' Act but dismissed that claim insofar as it alleged that World-Wide's wrongful conduct was in response to Empire Volkswagen's efforts to sell Ford automobiles from a Volkswagen-Porsche-Audi showroom. Judge Kram denied World-Wide's summary judgment motion regarding Empire Volkswagen's other Dealers' Act claims, as well as the pendent state law claims and World-Wide's counterclaims.*fn1

Appellants then moved, pursuant to Fed. R. Civ. P. 41(a)(2), for judgment dismissing all remaining claims against World-Wide and granting World-Wide's counterclaims. On appeal, they press their Dealers' Act and antitrust claims and seek to "revive" those claims voluntarily dismissed in the district court. We affirm.

I. BACKGROUND

Empire Volkswagen, principally owned by appellant Donald Amerling, operated Volkswagen and Porsche-Audi dealerships in Poughkeepsie, New York until the dealerships were terminated in 1981. Empire City Motors, an affiliated company also principally owned by Amerling, operated a Ford dealership at the same location and in the same facility as Empire Volkswagen, beginning in May 1977. Suzanne Properties, another company wholly owned by Amerling, owned the land and buildings housing the Volkswagen-Porsche-Audit and Ford Dealership. World-Wide is the exclusive distributor of Volkswagens, Porsches and Audis in the New York, New Jersey and Connecticut area.

In June 1975, Amerling accepted the offer of Rainer Josenhanss, an executive vice president of World-Wide to become World-Wide's Volkswagen and Porsche-Audi dealer for the Poughkeepsie area. Amerling contends that World-Wide agreed to allow Empire Volkswagen to operate both the Volkswagen dealership and the Porsche-Audi dealership from a single facility. However, as a formality, Amerling signed a letter, dated September 12, 1975, indicating his interest in the Porsche-Audi dealership and promising to relocate the Porsche-Audi dealership to a separate facility by December 31, 1976.

Empire Volkswagen and world-wide ultimately signed two dealership agreements, one for the Volkswagen franchise and one for the Porshe-Audi franchise. Amerling signed the agreements in his capacity as president of Empire Volkswagen. The agreements recited, inter alia, that the franchise would terminate upon Amerling's death, that Amerling would act as general manager, that he was a 90% beneficial owner of the dealerships and that he was president and treasurer of the dealerships.

In the fall of 1975, Empire Volkswagen began operating its Volkswagen and Porsche-Audi dealerships in a single sales and service facility. In December 1976, Amerling applied for a Ford franchise and offered to use the assets and facilities of his existing dealerships in connection with the Ford franchise. This would constitute "dualing," i.e., housing multiple, competing dealerships in a single facility.

World-Wide adamantly opposed dualing franchise facilities. At dealer meetings, Josenhanss warned dealers against dualing, stating that dealers who dualed their franchises could expect to get fewer automobiles than single-line dealers. However, as appellants concede, World-Wide's definition of dualing was confined to housing two or more competing franchises in a single facility. World-Wide had no objection to dealers owning and operating multiple franchises so long as they maintained a separate showroom for World-Wide's products.

Amerling informed World-Wide of his plans to become a Ford dealer in February 1977, at which time Josenhanss indicated that such an arrangement was unacceptable. Nevertheless, Amerling decided to become a Ford dealer and organized Empire City to act as the corporate franchise holder for Ford. In May 1977, Empire City commenced operation as a Ford dealership, using the same showroom, service facility and parts department used by the Volkswagen-Porsche-Audi dealership. The combined dealership was known as Empire City Motors.

Although the Volkswagen and Porsche-Audi dealership agreements do not prohibit dualing per se, ...


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