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Metropolitan Convoy Corp. v. Chrysler Corp.

Superior Court of Delaware, New Castle County

September 1, 1961

METROPOLITAN CONVOY CORPORATION, a corporation of the Commonwealth of Pennsylvania, Plaintiff,
CHRYSLER CORPORATION, a corporation of the State of Delaware, Defendant.

Page 618

[54 Del. 62] Ernest S. Wilson, Jr., Wilmington, for plaintiff.

Richard F. Corroon (of Berl, Potter & Anderson), Wilmington, and Keith A. Jenkins, Detroit, Mich., on the brief, for defendant.

[54 Del. 63] LYNCH, Judge.

The complaint, as filed, alleged four causes of action. We are not concerned with the first three causes of action.

The Fourth Cause of Action alleged that Chrysler Corporation tortiously interfered with certain contractual relations said to have existed between plaintiff and Great Lakes Forwarding Company [1] , looking to a merger of plaintiff and Great Lakes, or a possible sale of assets by Great Lakes to Metropolitan. The complaint charged the existence of an agreement between Great Lakes and Metropolitan which, because of Chrysler's tortious interference, Great Lakes breached. Plaintiff sought damages in the amount of $400,000 for this alleged tort.

After a preliminary and exploratory oral argument, at which it became apparent that plaintiff's arguments were not limited to an alleged interference by Chrysler with the alleged contractual relations between Metropolitan and Great Lakes, plaintiff filed an amendment to its complaint, alleging a Fifth Cause of Action. In this Fifth Cause of Action Metropolitan alleged that from September to December of 1956, it 'engaged in negotiations for the purchase of or merger with' Great Lakes; that Metropolitan 'had * * * reasonable economic expectancy that * * * the negotiations would result in plaintiff's purchase of or merger with' Great Lakes, to a profit of $400,000; it was further alleged that certain officials of Chrysler induced 'one Alvin McEvoy to tortiously interfere[54 Del. 64] with plaintiff's reasonable economic expectancies' in its negotiations with Great Lakes, and 'as a result of defendant's [Chrysler] tortious interference' McEvoy 'purchased' Great Lakes 'and damaged Metropolitan's reasonable economic expectancy * * *' to either merge with or purchase Great Lakes.

Chrysler answered plaintiff's Fourth Cause of Action by alleging that it 'is without knowledge or information sufficient to form a belief' and so denied the allegations set up in the complaint as the Fourth Cause of Action. Chrysler's answer to the Fifth Cause of Action was the same.

Chrysler moved for summary judgment on these two causes of action on the ground that with respect to such causes of action there is no genuine issue as to any material

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fact and that it was entitled to judgment as a matter of law.

Both sides engaged in lengthy and exhaustive discovery, and after a careful study of the affidavits, depositions, the exhibits thereto, answers to interrogatories, the briefs, and positions advanced in the oral argument, I am now ready to dispose of Chrysler's motion for summary judgment. I propose to set out what I will term Uncontroverted Facts in lieu of Findings of Fact, such as are made after a trial of a cause, as determined from the record before me.

Uncontroverted Facts

I. (a) Metropolitan was engaged in the business of hauling new automobiles by the 'truckaway' method from and to various parts of the United States, pursuant to Certificates of Convenience and Necessity issued by the Interstate Commerce Commission.

(b) Metropolitan at one time, and as recently as 1957, hauled Chrysler products from Detroit and Newark, Delaware, to destination points in the northeastern part of the United States.

[54 Del. 65] II. Great Lakes was likewise a truckaway carrier; hauling Chrysler products was its principal business to given points within several parts of the United States.

III. (A) Chrysler for many years had as many as 83 truckaway carriers serving it in the transportation of its finished products, such as trucks and automobiles, from its assembly plants to its franchised dealers.

(b) On the other hand, Chrysler's competitors had as few as 4, 5, or 6 carriers hauling their products. Chrysler executives in charge of traffic thought that Chrysler had too many carriers and prior to 1957 a study of the problem had begun, referred to as 'carrier retention program' with its objective,--to cut down the number of carriers.

(c) Chrysler's so-called 'carrier retention program' was presented to its Administrative Committee sometime in the Spring of 1957. On May 17, 1957 a meeting of the carriers who hauled Chrysler products was held in Detroit. At that meeting Chrysler representatives explained the 'carrier retention program'. It was adopted because of the inability of Chrysler carriers to handle the distribution of traffic to Chrysler's satisfaction.

(d) Chrysler's 'carrier retention program' involved the consolidation of various carriers and would result in fewer and bigger carriers serving Chrysler.

(e) Newberg [2] , as a member of Chrysler's Administrative Committee, participated in the decision to adopt the 'carrier retention program', but when the program was presented to the Committee, it did not include the names of carriers who would or would not be retained. Until about the time the final decisions were announced, Newberg did not know the names of the retained carriers. Until his first deposition was [54 Del. 66] taken on February 11, 1960, except for one meeting in late 1957 or early 1958, when he merely spoke to a Metropolitan representative, Newberg never had an occasion to consider the situation of Metropolitan under the 'carrier retention program.' He had nothing to do with the decision to retain Great Lakes as a carrier. He knew nothing about Great Lakes, so he could not have advised McEvoy whether he should acquire it.

(f) A principal effect of the 'carrier retention program' was to reduce the number of carriers hauling Chrysler products. Chrysler ultimately would up with about 20, instead of 83, carriers.

IV. Metropolitan and Great Lakes had engaged in merger negotiations prior to 1956 but with no resulting agreement.

V. During 1956 it was apparently generally known in the industry that Chrysler

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planned to effect a reduction in the number of carriers serving it.

VI. In light of this information, conversations were again held during the last four months of 1956 and continuing in early 1957, looking to a purchase of or merger between Metropolitan and Great Lakes. Metropolitan and Great Lakes, by and through their representatives, had a number of meetings in New York through the last four months of 1956.

VII. Jack Troy and his son, Melvin, President and Secretary-Treasurer of Metropolitan, together with Frank Heiss and George Duff, acted for and represented ...

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