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JUDICE'S SUNSHINE PONTIAC, INC. v. GMC

July 14, 1976

Judice's Sunshine Pontiac, Inc. and P. John Judice, Plaintiffs,
v.
General Motors Corp. and General Motors Acceptance Corp. Defendants


Brotman, D.J.


The opinion of the court was delivered by: BROTMAN

BROTMAN, District Judge:

 Presently before the court is a motion for a preliminary injunction. This application arises in the context of an action by the plaintiffs, Judice's Sunshine Pontiac, Inc. (hereinafter "Sunshine Pontiac") and P. John Judice (hereinafter "Judice") against the defendants, General Motors Corporation (hereinafter "General Motors") and General Motors Acceptance Corporation (hereinafter "GMAC"). The Amended Complaint alleges causes of action under the Sherman Act, Section 1, 15 U.S.C. § 1, *fn1" the Robinson-Patman Act, 15 U.S.C. § 13, *fn2" the Automobile Dealers' Day-in-Court Act, 15 U.S.C. § 1222, *fn3" the New Jersey Antitrust Act, N.J.S.A. 56:9-3 *fn4" and the common law. Plaintiffs seek treble damages, *fn5" costs and a reasonable attorney's fee under the federal and state antitrust laws. *fn6" Declaratory and injunctive relief is also sought.

 Fundamentally this is an antitrust action alleging an unlawful conspiracy and combination to restrain trade between General Motors, GMAC and other co-conspirators. *fn7" Plaintiffs maintain that the overall intent and purpose of the conspiracy and combination was and is to: destroy Judice as a competitor of dealerships owned by General Motors and its co-conspirators; allocate geographic markets among General Motors and its co-conspirators; prevent price competition; and discourage minority group members, such as Judice, from seeking to obtain dealerships and from competing with existing dealers. *fn8"

 No application to enjoin preliminarily the alleged illegal antitrust activities of General Motors is before the court. Rather, plaintiffs' application addresses itself primarily to certain procedural questions: namely, should this litigation continue and if so in whose control and at whose expense? Also involved is Judice's continued status as President of Sunshine Pontiac and as a member of its Board of Directors. Finally the application seeks to clarify the nature of Judice's continuing relationship with General Motors. Specifically plaintiffs' motion seeks to restrain General Motors and the Board of Directors from taking action to:

 
a. Remove plaintiff P. John Judice from the Board of Directors and as President and chief operating officer;
 
b. Interfere with the prosecution of this action including representation by existing counsel;
 
c. Refuse to pay the costs, including counsel fees, in connection with this litigation;
 
d. Override any decision made by plaintiff, P. John Judice, where said decision directly involves plaintiffs' relationship with General Motors. *fn9"

 Affidavits have been filed in support of and in opposition to the application. Pursuant to Fed. R. Civ. P. 52(a) the court makes the following Findings of Fact and Conclusions of Law:

 1. In the Spring of 1974 Judice expressed an interest in purchasing the dealership assets of Crest Pontiac, Inc., Oaklyn, New Jersey, which were then available for sale. Since Judice did not have sufficient capital to finance the dealership, he contacted Motors Holding Division, General Motors (hereinafter "Motors Holding"), which provides capital financing to prospective dealers who do not otherwise have access to the capital necessary to begin a dealership. Early in July a proposal was put together by Judice and the Zone Manager, Philadelphia Zone, Pontiac Motor Division, whereby Judice would form a dealership corporation to replace Crest Pontiac. This proposal was forwarded to the Pontiac Centeral Office in Michigan on July 18, 1974. Judice's Sunshine Pontiac, Inc. was incorporated as a Delaware corporation on August 19, 1974. On August 26, 1974 the proposal was tentatively approved by Pontiac Motor Division, subject to an investigation by Motors Holding. Subsequently Judice was notified of Motors Holding's approval. On September 19, 1974 a Pontiac Dealer Sale and Service Agreement was entered into between Sunshine Pontiac and Pontiac Motor Division. Sunshine Pontiac is located at 1200 White Horse Pike, Oaklyn, New Jersey. *fn10"

 2. Judice is President, chief operating officer and a member of the Board of Directors of Sunshine Pontiac. As President of Sunshine Pontiac Judice is charged with the responsibility of running the day-to-day operations of the dealership.

 3. When General Motors invests capital in dealerships its investment is channeled through the Motors Holding Dealer Investment Plan. The basic scheme of the Plan is that the dealer will invest all his available commercial investment funds, run the day-to-day operation of the dealership and buy out General Motors within a reasonable period of time, thus assuming sole ownership of the dealership.

 4. Motors Holding invested $120,3000 in Sunshine Pontiac. This investment consisted of $60,4000 in Class A voting shares and $60,5000 in a loan taking an unsecured promissory note bearing 6% simple interest. Judice invested $40,6000 in Class B non-voting shares. This investment consisted of $7,7000 of Judice's personal funds and $33,8000 borrowed from Progress Venture Capital Corporation, an investment corporation organized to assist minority persons, ...


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