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  "name": "CHRYSLER CREDIT CORPORATION, Plaintiff v. CHARLES M. REBHAN, CATHERINE REBHAN, DOUGLAS L. REBHAN, and NINA REBHAN, Defendants and Third Party Plaintiffs v. CHRYSLER CREDIT CORPORATION and CHRYSLER MOTOR CORPORATION, a/k/a CHRYSLER CORPORATION, Third Party Defendants",
  "name_abbreviation": "Chrysler Credit Corp. v. Rebhan",
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    "judges": [
      "Judges Hedrick and Eagles concur."
    ],
    "parties": [
      "CHRYSLER CREDIT CORPORATION, Plaintiff v. CHARLES M. REBHAN, CATHERINE REBHAN, DOUGLAS L. REBHAN, and NINA REBHAN, Defendants and Third Party Plaintiffs v. CHRYSLER CREDIT CORPORATION and CHRYSLER MOTOR CORPORATION, a/k/a CHRYSLER CORPORATION, Third Party Defendants"
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    "opinions": [
      {
        "text": "BRASWELL, Judge.\nThe plaintiff Chrysler Credit Corporation filed this action on 27 May 1982 against the defendants, Douglas and Charles Rebhan, as guarantors for the overdue financial obligations of Coral Gables Imported Cars, Inc., d/b/a Kalamazoo Chrysler-Plymouth. The defendants answered and added Chrysler Motor Corporation as a third-party defendant. Their counterclaim and third-party claim asserted that Chrysler Credit Corporation and Chrysler Motor Corporation have by their \u201cconduct and actions violated the terms of 15 U.S.C. 1222\u201d and have committed a civil conspiracy under Michigan law, causing the financial ruin of Coral Gables. The plaintiff moved to dismiss the counterclaim pursuant to G.S. 1A-1, Rule 12(b)(6) of the North Carolina Rules of Civil Procedure. From the order entered granting the plaintiffs motion, the defendant appeals.\nCoral Gables Imported Cars, Inc., d/b/a Kalamazoo Chrysler-Plymouth, is a Florida corporation qualified to transact business in Michigan. It entered into three Direct Dealer Agreements with Chrysler Motor Corporation in May of 1979 for the sale and service of Chryslers, Plymouths and Chrysler import motor vehicles as well as their accessories and parts. The defendants are the sole directors, officers, and shareholders of the dealership corporation. The corporation\u2019s inventory was financed by Chrysler Credit Corporation and the defendants were required to execute a \u201cContinuing Guaranty\u201d agreement, obligating themselves to pay all of the corporation\u2019s present and future obligations owed to Chrysler Credit.\nThe plaintiffs have sued the defendants on this agreement for approximately $300,000 as guarantors of the corporation\u2019s debts to Chrysler Credit Corporation. The defendants\u2019 counterclaim asserted that in the fall of 1979 Chrysler Motors, acting in concert with Chrysler Credit, began shipping unordered motor vehicles to dealerships, forcing the dealers to accept them. Chrysler Credit would then, without the dealer\u2019s authorization, place these vehicles on the dealer\u2019s \u201cfloorplan,\u201d forcing the dealers to pay for these motor vehicles. Coral Gables, being one of these dealerships affected, soon lost its financial viability and terminated its dealership in November of 1980. Since these additional motor vehicles became a financial obligation of Coral Gables, the defendants became liable for their payment under the \u201cContinuing Guaranty\u201d they executed with Chrysler Credit. The defendants alleged that, by forcing the additional cars on Coral Gables, Chrysler Credit and Chrysler Motor have violated the \u201cAutomobile Dealers\u2019 Day in Court Act\u201d statute under federal law and have committed civil conspiracy under Michigan common law.\nThe only issue before this Court is whether the plaintiffs G.S. 1A-1, Rule 12(b)(6) motion to dismiss the defendants\u2019 counterclaim for failure to state a claim upon which relief can be granted was properly allowed. A Rule 12(b)(6) motion tests the legal sufficiency of the claim. Sutton v. Duke, 277 N.C. 94, 176 S.E. 2d 161 (1970). The rules regarding the sufficiency of a complaint to withstand a Rule 12(b)(6) motion are equally applicable to a claim for relief presented in a counterclaim by the defendant. Brewer v. Hatcher, 52 N.C. App. 601, 604, 279 S.E. 2d 69, 71 (1981). A counterclaim is sufficient to withstand the motion where no insurmountable bar to recovery on the claim appears on its face. Id. at 605, 279 S.E. 2d at 71. Thus, the question becomes whether the counterclaim states a claim upon which relief can be granted on any theory. Benton v. Construction Co., 28 N.C. App. 91, 220 S.E. 2d 417 (1975).\nIn Count I of the counterclaim, the defendants state that they are entitled to relief under 15 U.S.C. \u00a7 1221, et seq., casually referred to as the \u201cAutomobile Dealers\u2019 Day in Court Act.\u201d In 15 U.S.C. \u00a7 1222, \u201c[a]n automobile dealer may bring suit against any automobile manufacturer engaged in commerce, in any district court of the United States in the district in which said manufacturer resides, or is found, or has an agent, without respect to the amount in controversy, and shall recover damages by him sustained and the cost of suit by reason of the failure of said automobile manufacturer ... to act in good faith in performing or complying with any terms or provisions of the franchise. . . .\u201d 15 U.S.C. \u00a7 1221(c) defines \u201cautomobile dealer\u201d as \u201cany person, partnership, corporation, association, or other form of business enterprise . . . operating under the terms of a franchise and engaged in the sale or distribution of passenger cars, trucks or station wagons.\u201d As a general rule, federal law has maintained that if the dealer named in a franchise is a corporation, then only the corporation itself, its receiver, or stockholder suing derivatively may maintain an action under this statute. Schmitt-Norton Ford, Inc. v. Ford Motor Co., 524 F. Supp. 1099 (D.C. Minn. 1981), aff\u2019d, 685 F. 2d 438 (8th Cir. 1982). Therefore, an individual, operating the automobile dealership in corporate form, had no standing to sue the manufacturer in an individual capacity if the corporation is still viable and could in fact sue the manufacturer. Rodrique v. Chrysler Corp., 421 F. Supp. 903 (E.D. La. 1976). In the present case, the defendants do not allege that the corporation is no longer viable or has been dissolved, but only that the corporation \u201cdoes not presently transact any business.\u201d Therefore, under the general rule, the defendants have no standing to sue Chrysler Credit or Chrysler Motor Corporation under 15 U.S.C. \u00a7 1222.\nThe one exception to this rule preventing individuals from suing the manufacturer is when the individuals are inextricably woven into the franchise agreement by provisions which require them to maintain beneficial ownership and control of the stock. These individuals who are essential to the operation of the franchise, who have extensive control over the corporation\u2019s activities, and who have a dominant financial interest in the corporation, may maintain an action against the manufacturer. York Chrysler-Plymouth, Inc. v. Chrysler Credit Corp., 447 F. 2d 786 (5th Cir. 1971). See also Rea v. Ford Motor Co., 406 F. Supp. 271 (W.D. Pa. 1975), vacated and remanded on other grounds, 560 F. 2d 554 (3d Cir. 1977); Moorehead v. General Motors Corp., 442 F. Supp. 873 (E.D. Pa. 1977). The exception is allowed because these individuals are technically the \u201cdealers\u201d although their business is being conducted through a corporate form. From the record before this Court, the counterclaim states that the defendants are the sole stockholders, directors, and officers of Coral Gables, and that they were essential to its operation and in control of the corporation. The defendants argue therefore that because of this exception they have standing to assert this counterclaim.\nWe do not agree. The defendants are not suing in their capacity as \u201cdealers,\u201d but are suing in order to avoid their obligations as \u201cguarantors\u201d under the \u201cContinuing Guaranty\u201d agreement with Chrysler Credit. The \u201cDirector Dealer\u201d franchise agreements entered into by Coral Gables with Chrysler Motor is a separate contract from the \u201cContinuing Guaranty\u201d agreement executed by the defendants to Chrysler Credit. The allegations set forth in the counterclaim have not arisen under the guaranty contract but under the terms of the franchise agreement between Chrysler Motor Corporation and Coral Gables who is not a party to this lawsuit. The guarantors cannot by way of counterclaim assert an independent cause of action belonging to the debtor and seek affirmative recovery against the creditor, Chrysler Motor Corporation. See Service Co. v. Sales Co., 259 N.C. 400, 418, 131 S.E. 2d 9, 23 (1963), affirmed, 264 N.C. 79, 140 S.E. 2d 763 (1965). If the principal debtor, Coral Gables, had been sued jointly with the defendants, a claim in favor of Coral Gables may have been set off by the defendants against the demand of Chrysler Credit. Id. Since Coral Gables has not been named as a party, no setoff is possible.\nThe second count in the defendants\u2019 counterclaim states that the conduct of Chrysler Motors and Chrysler Credit constitutes actionable civil conspiracy under Michigan law. As discussed above, this claim is also not assertable by the defendant-guarantors. In any event, the defendants acknowledged in their counterclaim and third-party claim that \u201cChrysler Credit is a wholly-owned subsidiary and agent of Chrysler Motors.\u201d Because the present conspiracy claim is based on an alleged unlawful agreement between a corporation and its agent, this claim cannot stand. \u201cIn legal contemplation, a corporation and its agents comprise but a single person, one less than the requisite number for a conspiracy.\u201d Schroder v. Dayton-Hudson Corp., 448 F. Supp. 910, 915 (E.D. Mich. 1977), modified on other grounds, 456 F. Supp. 650 (E.D. Mich. 1978). Thus, there can be no conspiracy. With regard to Count II, we hold the plaintiffs Rule 12(b)(6) motion was properly granted. Counts III and IV have not been addressed by the defendants in their brief. We deem that they have abandoned their assignments of error as they relate to these counts. Rule 28(a), N.C. Rules App. Proc.; Sutton v. Sutton, 35 N.C. App. 670, 242 S.E. 2d 644 (1978).\nAffirmed.\nJudges Hedrick and Eagles concur.",
        "type": "majority",
        "author": "BRASWELL, Judge."
      }
    ],
    "attorneys": [
      "Fairley, Hamrick, Monteith & Cobb by Laurence A. Cobb and F. Lane Williamson for plaintiff appellee.",
      "Robert J. Deutsch for defendant appellants."
    ],
    "corrections": "",
    "head_matter": "CHRYSLER CREDIT CORPORATION, Plaintiff v. CHARLES M. REBHAN, CATHERINE REBHAN, DOUGLAS L. REBHAN, and NINA REBHAN, Defendants and Third Party Plaintiffs v. CHRYSLER CREDIT CORPORATION and CHRYSLER MOTOR CORPORATION, a/k/a CHRYSLER CORPORATION, Third Party Defendants\nNo. 8326SC78\n(Filed 7 February 1984)\nRules of Civil Procedure 8 13\u2014 inability to assert independent cause of action by way of counterclaim\nIn an action instituted by plaintiff to recover from defendant guarantors overdue financial obligations of a car dealership, the trial court properly dismissed the counterclaim of defendant against third party defendant since the allegations set forth in the counterclaim did not arise under the guaranty contract but arose under the terms of a franchise agreement between Chrysler Motor Corporation and the dealership who is not a party to the lawsuit. The guarantors cannot by way of counterclaim assert an independent cause of action belonging to the debtor and seek affirmative recovery against the creditor.\nAPPEAL by defendants from Snepp, Judge. Order entered 14 October 1982 in Superior Court, MECKLENBURG County. Heard in the Court of Appeals 8 December 1983.\nFairley, Hamrick, Monteith & Cobb by Laurence A. Cobb and F. Lane Williamson for plaintiff appellee.\nRobert J. Deutsch for defendant appellants."
  },
  "file_name": "0255-01",
  "first_page_order": 287,
  "last_page_order": 292
}