Supplemental Appendix — Beaudry Motor Co. v. Abko Properties, Inc.

( Supreme Court, U.S,

Ww, FILED

No. 85-2085 JUL 24 96g

JOSEPH F. SPANIOL, JR,

CLERK

IN THE

SUPREME COURT OF THE UNITED STATES

October Term, 1986

Beaudry Motor Company,

Petitioner,

v.

Abko Properties, Inc., Chrysler

Corporation, Chrysler Motors Corporation,

and Chrysler Realty Corporation,

Respondents.

Writ of Certiorari to the

United States Court of Appeals,

Ninth Circuit

Supplemental Appendix to

Petition for Writ of Certiorari

Michael J. Meehan

Post Office Box 2268

Tucson, Arizona 85702

602/622-3531

Counsel for Petitioner

Appendix B

Appendix C

Appendix D

Appendix E

TABLE OF APPENDICES

Ninth Circuit Court of

Appeals Order denying

Petitions for Rehearing

and rejecting suggestion

for rehearing en banc.

United States District

Court for the District of

Arizona Order granting

Defendant's Motion for

Summary Judgment and

denying Plaintiff's Cross

Motion for Summary

Judgment, dated December

7, 1983.

United States District

Court for the District of

Arizona Order awarding

Defendant's attorneys’

fees, dated March 21,

1984.

United States District

Court for the District of

Arizona Civil Minutes

dated January 5, 1984

denying Plaintiff's

Motions for New Trial and

to Amend Complaint.

——= SERS RERBRE REESE EEE Ss

APPENDIX B

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

BEAUDRY MOTOR COMPANY,

an Arizona corporation, CA Nos. 84-1888

84-1889

Plaintiff/Appellant/

Cross~Appellee, CV 82-262 TU ACM

vs. ORDER

ABKO PROPERTIES, INC., a

DE corporation (formally

known as CHRYSLER REALTY

CORPORATION) ; CHRYSLER

CORPORATION, a DE

corporation; CHRYSLER

MOTORS CORPORATION, a DE

corporation; and CHRYSLER

REALTY CORPORATION, a DE

corporation,

Defendants/Appellees/

Cross-Appellants.

ee ee ee ee ee ee et et ee i ee ee ee ee et ee eet ee”

Before: POOLE, NELSON, Circuit Judges,

and KELLEHER, District Judge”

The panel has unanimously voted to

deny both the petition for rehearing and

the amended petition for rehearing. Judges

Poole and Nelson have also voted to reject

the suggestion for rehearing en banc, and

Judge Kelleher has so recommended.

The full court has been advised of

the suggestion for rehearing en banc and no

judge in active service has requested a

vote to rehear the matter.

Pursuant to Rule 35(b) of the

Federal Rules of Appellate Procedure, the

petitions for rehearing are DENIED and the

suggestion for rehearing en banc is

REJECTED.

* The Honorable Robert J. Kelleher,

Senior District Judge for the Central

District of California, sitting by

designation.

B-2

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APPENDIX C

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

BEAUDRY MOTOR COMPANY,

an Arizona corporation,

Plaintiff,

No. 82-262 TUC ACM

vs. ORDER

ABKO PROPERTIES, INC.,

et al

Defendants.

a a te et a tel

This matter is before the court

pursuant to defendant's Motion for Summary

Judgment and plaintiff's Cross Motion for

Summary Judgment, under Rule 56,

Fed.R.Civ.P. Defendant's Motion for

Summary Judgment is granted and plaintiff's

Cross Motion for Summary Judgment is

denied.

Beaudry Motor Company (BMC), a

Chrysler car dealership, brought this

action against ABKO Properties, Inc.

(ABKO), Chrysler Corporation, Chrysler

Motor Corporation, and Chrysler Realty

Corporation (CRC). In four counts of its

Second Amended Complaint, BMC alleges the

defendants, acting in conspiracy with each

other, engaged in acts violative of §§ 1

and Zz of the Sherman Act and the Arizona

Uniform State Antitrust Act. BMC's fifth

count seeks declaratory judgment.

The suit centers around the 1968

relocation of BMC's dealership. As part of

that relocation, BMC purchased property

from CRC for the development of a

dealership facility, and obtained financing

from Southern Arizona Bank for the

1 Neither ABKO nor Chrysler Motor

Corporation presently exist as separate and

identifiable identities.

C=-2

——~errnrrerrr rPrrer hf =

construction of the facility. In obtaining

this financing, Southern Arizona insisted

upon additional security from BMC. A

lease/sublease and Assignment of Lease and

Attorn Agreement provided the additional

security required.

Under the lease/sublease, BMC leased

the premises to CRC for 25 years, with five

options to renew for five years each. The

premises were then subleased back to BMC.

As per the Assignment and Attorn

Agreements, the rental proceeds and BMC's

position as lessor were transferred to

Southern Arizona Bank.

As BMC has abandoned its antitrust

claims,* Count 5 is the only claim

remaining before this court. Count 5 seeks

2 puring oral arguments on the

motions for summary judgment, BMC advised

this court and opposing counsel that it had

abandoned its antitrust claims, Counts l

through 4.

C=-3

a judgment declaring the lease/sublease

arrangement to be void as unconscionable.

BMC's unconscionable cause of action

accrued in 1969 at the time the

lease/sublease was executed. "The

execution of the unconscionable lease is

the event giving rise to a claim, not

withstanding that it's effect may last the

life of the lease." 35 Park Avenue

Corporation v. Campagna, 399 N.E.2d 1144,

1145 (NY Ct.App. 1979). BMC's 14 year old

lease/sublease is therefore barred by the

six years statute of limitation for written

contracts, A.R.S. §12-548, and the clain

for declaration of unconscionability must

be dismissed.

BMC's claim for declaratory judgment

as to the interpretaticn of the

lease/sublease fails to present a

justiciable issue. BMC alleges the

following controversies

C=-4

SeePrrrrRrerr ee = =

l. Whether BMC is granted options

to renew and extend sublease for the same

term and conditions as are applicable to

any renewals which may be granted CRC;

2- What rent is payable under the

lease/sublease;

3. Whether BMC is required to pay

or reimburse CRC for privilege taxes, if

they are assessed;

4. Whether CRC can terminate the

sublease if BMC terminates the franchise

agreement with Chrysler;

5. Whether use of the property for

purposes other than Chrysler dealership

constitutes a breach of the lease;

6. Whether the lease/sublease has

been extinguished by the doctrine of

merger.

The facts show no present

controversy between the parties as to the

interpretation of the lease/sublease: No

C-5

rent has been demanded; no taxes have been

assessed; the property is not being used

for purposes other than a Chrysler

dealership and there is no such threat;

time for renewal of the lease/sublease has

not arisen; there has been no termination

of the franchise agreement, nor has there

been threat of such.

"An action for declaratory relief

only justifies a declaration of rights upon

an existing state of fact, not one which

may or may not arise in the future or which

might or might not develop. Such cannot

form the basis for declaratory judgment."

City of Mesa v. Salt River Project

Agricultural Improvement and Power

District, 92 Ariz. 91, 106, 373 P.2d 722,

733 (1962), appeal dismissed, 83 S.Ct. 1018

(1963). The controversies alleged are

based on facts anticipated by BMC. This

~“ BPREeHEEEBEEEBeBESeBEHee&s fs. fs

court cannot render declaratory judgment on

the basis of such hypothetical disputes.

BMC's Cross Motion for Summary

Judgment asserts two new legal theories not

alleged in its Second Amended Complaint.

BMC seeks to have the court declare the

lease/sublease a mortgage under A.R.S. §33-

702(A) and decree that it is extinguished

now that CRC has been discharged by First

Interstate Bank.* Under its second theory,

BMC seeks equitable relief in the form of

imposition of a constructive trust.

Neither BMC's original complaint nor

Second Amended Complaint sound in statutory

mortgage or constructive trust. The

complaint would have to be amended yet

again before the court could give the

relief sought in the Cross Motion for

Summary Judgment. “The liberal pleading

3 First Interstate Bank is the

successor to Southern Arizona Bank.

C-7

policy in the Rules prevents dismissal of a

meritorious action for purely formal or

technical reasons. The district court is

not required, however, to speculate over

the nature of the plaintiffs' claim or to

refuse to enter summary judgment for the

defendant simply because the plaintiffs

may, theoretically, be entitled to recover

under a cause of action based on facts

never alleged in the complaint." Murphy v.

White Hen Pantry Co., 691 F.2d 350, 353

(7th Cir. 1982).

Rule 56(c) provides that issues of

material facts must be evidenced from "the

pleadings, depositions, answers to

interrogatories .. . admissions on file

and affidavits." BMC cannot now create a

genuine issue of material fact by alleging

new theories not raised in the p!eadings.

See Agustin v. Quern, 611 F.2d 206 (7th

Cir. 1982).

For reasons stated above,

defendant's Motion for Summary Judgment is

granted, and plaintiff's Cross Motion for

Summary Judgment is denied.

Dated this 7th day of December,

1983.

ALFREDO C. MARQUEZ

United States District Judge

APPENDIX D

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

BEAUDRY MOTOR COMPANY,

an Arizona corporatioi:,

Plaintiff,

No. 82-262 TUC ACM

ORDER

vs.

ABKO PROPERTIES, INC.,

et al

Defendants.

ee ee ee ee eee ee See See See ee ee ee ee

This matter is before the court on

the defendant's application for an award of

attorney's fees. The court previously

granted summary judgment in favor of the

defendants. The action centered around the

1968 relocation of Beaudry's automobile

dealership. As part of the relocation,

Beaudry entered into a lease/sublease and

D-1

naa eTrllCcrCCOCClC TCC TCCCUClC CC CCTCOUlC CCC CUCU CUCU CCC CUCU CC ClLlC CECE UC Ell

assignment of lease and attorn agreement

with Chrysler Realty Corporation (CRC).

Beaudry's complaint contained four counts

alleging that the defendants, acting in

conspiracy with each other, engaged in acts

violative of sections 1 and 2 of the

Sherman Act and the Arizona Uniform State

Antitrust Act. Beaudry's fifth count

sought declaratory relief on the lease

agreement on the ground of

unconscionability.

The motion for summary judgment

filed by the defendants is based entirely

on the depositions of Lee Beaudry,

president of the plaintiff corporation and

his son, Robert, who is the executive vice-

president of the corporation.

The defendants content they are

entitled to attorney's fees on two grounds:

(1) The plaintiff's claims were

brought and maintained frivolously,

D-2

unreasonably, without foundation and/or bad

faith.

(2) Plaintiff's entire complaint

arose out of contract and defendants are

entitled to attorney's fees.

The court finds that the defendants

are entitled to some attorney's fees under

either theory. Very little investigation

would have been required for plaintiffs to

determine that the claims set forth in the

complaint were barred by the statute of

limitations. 15 U.S.C. §15(b), provides

that private antitrust actions for damages

are "forever barred unless commenced within

four years after the cause of action

accrues." The agreement which is the

subject of the action was executed in July

of 1969. The Complaint was filed in 1982.

the defendants were able to establish this

affirmative defense by deposing two

officers of the plaintiff corporation.

D=-3

== ZEEE E EEE EEE E-

Once the motion for summary judgment was

filed the plaintiff abandoned the antitrust

claims and attempted to change their theory

on the fifth count.

The court may award attorney's fees

where an antitrust action is clearly barred

by the statute of limitations and was

unreasonably filed. Ellingson v.

Burlington Northern, Inc., 653 F.2d 1327

(9th Cir. 1981). In addition, the court

may award attorney's fees to defendants in

an antitrust action, despite an absence of

bad faith, where there had been prior

contractual dealings between the parties

and the suit was unreasonable. United

States v. Standard Oil Company of

California, 603 F.3d 100 (9th Cir. 1979).

The court finds that the defendants are

entitled to recover attorney's fees under

either theory.

The petition for attorney's fees

contains time sheets showing 850.3 hours of

attorney and paralegal time spent on

defending the claims. Defendants are

requesting attorneys fees in the sum of

$73,594.00 and $4,956.27 in costs.! The

recapitulation of the time schedules

contains the names of four attorneys and

one paralegal who worked on the case. The

court has reviewed the schedule carefully

and it appears that 259.8 hours are

directly related to work done on the

statute of limitations. It is unfortunate

that the clients incurred legal expenses of

approximately $150,000 in a case which had

no merit to begin with. (The court is

assuming that plaintiff's counsel spent the

1 The sum of attorney's fees

requested by defendants for time on a

motion for summary judgment is almost the

equivalent of one year salary of a federal

district judge.

D-5

same amount of time as the defendant's

attorneys and probably billed their clients

approximately the same amount.) Two

hundred and fifty-nine hours is an

inordinate amount of time to spend on a

motion for summary judgment based on the

statute of limitations. There were no

disputed facts on the question of the

statute of limitations.

Plaintiffs do not contest the

billing rate set forth in the petition for

attorney's fees. However, the court should

exclude those hours that were “excessive,

redundant or otherwise unnecessary."

Hensley v. Eckerkhart, 103 S.Ct. 1933,

1939-40 (1983). The schedule shows that

defense counsel spent 85.6 hours

researching the question of the statute of

limitations and tying arrangements, 96.8

hours in preparation of the motion for

summary judgment and 68.9 hours in

D-6

depositions or preparations of the two

depositions which were used for the summary

judgments. These amounts are excessive.

The court feels that the sum of $8,000.00

is more than fair compensation for the time

that should have been reasonably spent in

getting this matter dismissed on the basis

of the statute of limitations. In setting

this amount the court has considered the

factors set forth by the Ninth Circuit in

Kerr v. Screen Extras Guild, Inc., 526 F.2d

67 (9th Cir. 1975). This factors include:

(1) The time and labor that should

have been reasonably expended;

(2) Whether new and difficult

questions were presented;

(3) The skill required to properly

perform the task;

(4) The preclusion of other

employment caused by the litigation;

(5) The customary fee charged;

D-7

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(6) Whether the fee was contingent

or fixed;

(7) The limitations imposed by the

client or the case;

(8) The amount invoived and the

results achieved;

(9) The experience, reputation and

ability of counsel;

(10) The undesirability of the case;

(11) The professional relationship

with the client; and

(12) Awards given in similar cases.

The court could not consider all of

these factors because there was no evidence

presented to the court upon all of the

factors. The most important ones which the

court has considered are l, 2, 3, 5, 8, 9,

10 and 12.

IT IS ORDERED that judgment be

entered in favor of the defendants and

against the plaintiff in the sum of $8,000

D-8

)

as and for attorney's fees. Defendants

have not furnished the court with any

information on the costs and defendants’

reply seems to have abandoned this clain.

The claim for reimbursement of cost is

denied.

Dated this 2lst day of March, 1984.

ALFREDO C. MARQUEZ

United States District Judge

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APPENDIX E

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

(CIVIL MINUTES-GENERAL)

Civil Case No. CIV~-82-262-TUC-ACM

Date: January 5, 1984

Title: Beaudry Motor Co. v. Abko

Properties, Inc.

HON. ALFREDO C. MARQUEZ JUDGE

For reasons set forth in defendant's

response to plaintiff's motions for new

trial and to amend complaint,

IT IS ORDERED that plaintiff's

motions are denied.