Devalk Lincoln Mercury, Inc. v. Ford Motor Company

811 F.2d 326 (7th Cir. 1987)

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Nature of the Case

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Facts

Ford (D) looked at its coverage in northwest Chicago and decided that it should eliminate 1 of its 3 dealerships in that area. Unaware of this decision, DeValk (P) was negotiating with Czarnowski Lincoln-Mercury, one of the three dealerships, to purchase its assets and approached D to get approval to operate at Czarnowski’s old location. D approved the deal. Despite new ownership, the dealership continued to suffer. Just a year later, D noticed P that the dealership was being placed on the delete status, which meant that once P was no longer the majority shareholder, d would not continue the dealership. A few months later P hired Fitzgeral as its sales manager, and he purchased a 45% interest in the dealership. They turned profits in February, March, and April but by August of 1979 they decided to terminate, and they submitted their resignation effective in October. They closed their doors and D took back inventory, parts, and current model automobiles and credited the accounts. The provisions of the dealer agreement stated that D will take back these items, but that was contingent upon the dealer releasing d from all other liability to the dealer except under certain subparagraphs. One of those claims related to mediation under the Dealer Policy Board. The agreement specifies that any appeal to the Policy Board is a condition precedent to the Dealer’s right to pursue any other remedy available under the law. P did not appeal their dispute with D to the Policy Board and just filed a suit against D. D moved for summary judgment and the court granted it. This appeal resulted.