was only to find potential customers for Amstar; the terms and price of a resultant sale were set solely by Amstar. Id.
Other courts have found that the corporate structure itself is one aspect which determines whether there are separate units or one entity. Knutson v. Daily Review, Inc., supra at 802; accord, Kiefer-Stewart Co. v. Joseph E. Seagram & Sons, Inc., 340 U.S. 211, 71 S. Ct. 259, 95 L. Ed. 219 (1951); Perma Life Mufflers v. International Parts Corp., 392 U.S. 134, 88 S. Ct. 1981, 20 L. Ed. 2d 982 (1968); Timken Roller Bearing Co. v. United States, 341 U.S. 593, 71 S. Ct. 971, 95 L. Ed. 1199 (1951). See also P. Areeda, Antitrust Analysis 319 (2d ed. 1974).
In the instant case, the "economic realities" of the relationship between plaintiff Katinsky and defendant Radio Shack lead this Court to the conclusion that for purposes of the Sherman Act, the plaintiff is not a separate entity constituting an independent step in the Radio Shack distribution process. First, defendant has retained title to the goods which are sold in the Ellisburg store; second, Radio Shack bears the risk of loss for the goods in the Ellisburg store; and third, the management of Radio Shack, as opposed to the plaintiff, is responsible for the major and critical business decisions made with respect to the Ellisburg store. Although plaintiff has been delegated an active role in managing the store by virtue of the fact that plaintiff is responsible for the hiring, firing and supervising of the store employees, in addition to the responsibilities of salaries and general operating expenses, the role is that of a manager who has an opportunity and incentive to increase his earnings by proper management of the store and generation of sales. The crucial business decisions, such as those with respect to selection of merchandise and sales term policies, are made by Radio Shack. In addition, Radio Shack is responsible for the risk of loss and retains title not only to its trade name, trade marks and service marks, but also to the store merchandise until the moment a retail sale is consummated. The relationship between the parties cannot be characterized as one between separate economic entities in a chain of distribution; but as the parties themselves initially characterized their Agreement-one between joint venturers.
Therefore, the motion for partial summary judgment with respect to count one, violation of section 1 of the Sherman Act, is granted.
FRAUD IN THE INDUCEMENT
Plaintiff alleges that the opening of three Radio Shack stores within five miles of his store violated oral assurances made to him by a Radio Shack representative that such openings would not occur. Plaintiff contends such action resulted in fraud in the inducement. Defendant denies that any such representations were made to the plaintiff. The defendant also contends that, even if the representative did make any such assurances, plaintiff has no cause of action because he has failed to establish the elements of fraud in the inducement.
Plaintiff must establish the following elements in order to prove fraud in the inducement under New Jersey law. The plaintiff must prove a false representation by Radio Shack, knowledge or belief by Radio Shack of the falsity, an intention that the plaintiff must act thereon, reasonable reliance by plaintiff on the false representation, and resultant damage. In the Matter of Paragon Securities, 589 F.2d 1240, 1242 (3d Cir. 1978); Parker Precision Products Co. v. Metropolitan Life Insurance Co., 407 F.2d 1070, 1076 (3d Cir. 1969). The defendant has moved for summary judgment on this issue, alleging that there are no material issues of fact. The defendant claims first, that the plaintiff cannot show any statement was an intentionally false representation; second, that the alleged falsity of any representation must be considered in light of the circumstances under which the representation was made, such as the written agreement itself which provides for termination by either party after two years; and third, that the plaintiff's reliance on any representation was not justifiable and reasonable.
The plaintiff contends that there are material issues of fact which must be determined regarding fraud in the inducement; first, with respect to whether or not the false representation was made by defendant with a false state of mind, the plaintiff alleges there are facts in dispute respecting any inferences that may be drawn by the conduct of the defendant's agent, Mr. McKenzie; second, plaintiff contends that the circumstances under which the representation was allegedly made included the fact that the policy allegedly stated was not collateral, but a major policy which defendant's agent knew at that time could not be fulfilled. This is disputed by the defendant Radio Shack. Finally, the plaintiff contends that reliance was entirely justifiable under the facts and circumstances of the situation. The plaintiff relied upon the statements of the agent of the defendant and believed the representations made were within the scope of Mr. McKenzie's agency to represent.
This Court concludes that there are material questions of fact which cannot be resolved on this motion. Therefore, partial summary judgment as to this issue is denied.
IMPROPER CALCULATION OF PLAINTIFF'S SHARE OF THE PROFITS
Plaintiff claims that he is entitled to share in Radio Shacks's "upstream" profits from the manufacturing and distribution processes based upon the Agreement between the parties wherein the parties are to share equally in the gross profits of the store after certain deductions are made. The dispute centers upon the precise calculation of the cost of goods sold. Plaintiff maintains that Radio Shack has improperly calculated the line described in the formula as "Plus Purchases" in two respects: first, the plaintiff challenges the imposition of a warehouse charge on all items shipped to his store; and second, the plaintiff disputes the actual warehouse prices filed by Radio Shack as not indicative of Radio Shack's true costs.
Acknowledging the addition of a warehouse handling charge to the computation of the cost of goods sold, Radio Shack states that the imposition of such a charge was disclosed to the plaintiff since he began operation of the store. Radio Shack also states that this charge is "disclose(d) to the penny" in each invoice.
With respect to the actual warehouse prices, Radio Shack contends that the company transfers inventory to the Ellisburg store at the same prices that they transfer inventory to every Radio Shack company store. In addition, Radio Shack contends that the contract is not ambiguous. Paragraph 6 reads in part: "The gross profit earned on the sale of merchandise by the store shall be divided equally between the Company and the Manager." (emphasis added) Assuming that the contract is ambiguous, Radio Shack alternatively argues that the course of conduct between the parties resolves any ambiguity in the contract.
Summary judgment may be granted as a matter of law where there are no material issues of fact in dispute. Fed.R.Civ.P. 56. In this case, the precise meaning of a term in the contract is in dispute. Ambiguity of contract terms and whether course of dealings are determinative of the meaning of the contract are issues that must be resolved at trial. Manetas v. International Petroleum Carriers, Inc., 541 F.2d 408, 413 (3d Cir. 1976); Kress, Dunlap & Lane, Ltd. v. Downing, 286 F.2d 212, 214-15 (3d Cir. 1960). See Mellon Bank, N.A. v. Aetna Business Credit, Inc., 619 F.2d 1001, 1009-11 (3d Cir. 1980). Therefore, summary judgment as to this issue is denied.
Partial summary judgment is therefore granted with respect to claim 1, violation of section 1 of the Sherman Act, and denied with respect to claims 4 and 6, violation of the restrictive covenant and improper calculation of the plaintiff's share of the profits.
(The following is a transcript of the court's bench opinion on motions for directed verdict as to those issues not resolved by the foregoing Opinion partially granting defendant's motion for summary judgment.)