D. Patrick, Inc. v. Ford Motor Co.

D. Patrick, Inc. v. Ford Motor Co.

Opinion

 [*456]  ROVNER, Circuit Judge. 

D. Patrick, Inc. ("Patrick"), operates a Ford Motor Company ("Ford") dealership in Evansville, Indiana. After Ford notified Patrick  [*457]  that it planned to open a second Evansville dealership, Patrick asked the district court to find Ford in contempt of a 1979 settlement agreement between Ford and Patrick's predecessor-in-interest. The court denied Patrick's motion for a preliminary injunction and dismissed the contempt claim. Patrick appeals, and we affirm.

I. FACTS

In 1978, Patrick's predecessor, Key Motors, Inc. ("Key"), sought to enjoin Ford from terminating its 1972 sales and service agreement. After the court entered a preliminary injunction, the parties settled the suit. The district court dismissed the case with prejudice on September 12, 1979, but retained jurisdiction "for the purposes of the enforcement of [the settlement] agreement and subject to the contempt powers of this court in the event of a violation [**2]  thereof."

The settlement agreement permitted Key to open a branch dealership at a location in eastern Evansville. The agreement went on to provide that: After a Market Representation Planning Study of the Evansville area has been conducted, the results of that study will be taken into consideration by Ford in determining whether Key's branch will continue and/or whether a second Ford dealership will be established in the Evansville area. . . . In the event, as a result of the Market Representation Study, Ford concludes . . . that a second Ford dealership should be established in the Evansville area and that Key's branch must be closed, Key shall close its branch within two (2) years from the date of that determination, but such closing need not occur prior to three (3) years from the date of the settlement . . . .

At the time the parties entered into this agreement, Key's dealership was located in downtown Evansville. Although the agreement permitted Key to open a branch location on Evansville's east side, Key elected not to do so immediately. In 1981, Ford conducted a Market Representation Planning ("MRP") study, which concluded that eastern Evansville was becoming the preferred  [**3]  market area. The study did not recommend a second dealership for the Evansville area "at this time," but suggested that Key relocate to the east side. Key declined to relocate, but did seek permission to open an east-side branch location as envisioned by the settlement agreement.

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