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Whirlpool Corp. v. U.M.C.O. Int'l Corp.

United States District Court for the Southern District of Florida

October 16, 1990, Decided ; October 16, 1990, Filed

Nos. 85-3466-CIV-WMH, 88-0868-CIV-WMH



This action involves two consolidated cases, both of which are before the Court on two motions for summary judgment by Whirlpool Corp. (hereinafter "Whirlpool"), against UMCO International (hereinafter "UMCO").

I. Background

In late 1984, UMCO entered into negotiations with Whirlpool to establish a distributorship in Puerto Rico for Whirlpool products. UMCO's stated objective was to take over what it feels was an "exclusive" distributorship in Puerto Rico which was formerly enjoyed by the Protane Gas Company. On December 21, 1984, UMCO executed a standard Whirlpool distributorship to be effective December 28, 1984, for a one year period ending December 28, 1985. There is no explicit term in the agreement which grants to UMCO the same exclusive rights and privileges that it contends were previously held by Protane Gas. It is UMCO's disappointment over its unrequited desire to be Whirlpool's "exclusive dealer" which [**2]  animates the conflict now unfolding before this Court.

Whirlpool's interests did indeed lie beyond an exclusive relationship with UMCO. Approximately six weeks prior to Whirlpool's execution of the agreement with UMCO, Whirlpool had entered into another distributorship agreement with Western Auto Sales (hereinafter "Western Auto"), which contemplated entering the Puerto Rican market sometime in 1985. UMCO, however, was not wholly in the dark concerning this agreement between Whirlpool and Western Auto, and had in fact made inquiries as to what impact the Whirlpool/Western Auto liaison would have on the Whirlpool/UMCO relationship.

In the Fall of 1985 Whirlpool began supplying Western Auto of Puerto Rico, and the relationship between UMCO and Whirlpool soured. By Spring of 1985 UMCO had initiated this action against Whirlpool in the Superior Court of Puerto Rico. The allegations included violations of Law 75, Dealers' Contracts, 10 L.P.R.A. sec. 278 et seq. for impairment of its distributorship agreement; and violations of the Puerto Rico Anti-Monopoly Act, 10 L.P.R.A. sec. 263 (the Puerto Rican counterpart of the Robinson-Patman Act) for price discrimination. This action was removed [**3]  on grounds of diversity of citizenship in April of 1985 to the United States District Court for the District of Puerto Rico.

Now in federal court, UMCO moved to enjoin Whirlpool from selling its products to Western Auto. The plot then thickens. Pursuant to this motion for injunction, there was an evidentiary hearing during which Whirlpool learned of certain dealings  [*1559]  which caused it to conclude that UMCO had been bribing Whirlpool's sales manager. In redress for these alleged bribes, Whirlpool initiated its own proceedings before this Court for violations of the Federal Racketeering Influenced Corrupt Organizations Act (RICO).

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748 F. Supp. 1557 *; 1990 U.S. Dist. LEXIS 14128 **; 1991-1 Trade Cas. (CCH) P69,445

WHIRLPOOL CORPORATION, Plaintiff/Counter-defendant, v. U.M.C.O. INTERNATIONAL CORP., UMCO S.A., UMCO, C.A., and R. CLAYTON UMBEL, Defendants/Counter-plaintiffs; U.M.C.O. INTERNATIONAL CORP., Plaintiff, v. WHIRLPOOL CORP., Defendant


terms, parties, dealer, distributorship, established relationship, contrahendo, culpa, summary judgment, termination, summary judgment motion, good faith, prices, products, negotiations, non-movant, unilateral, detrimental, recommendation, contractual, distributor, bargaining, purchasers, antitrust, contracts, disparate, impaired, grounds, fault, price discrimination, law of the case

Civil Procedure, Discovery, Methods of Discovery, General Overview, Summary Judgment, Entitlement as Matter of Law, Opposing Materials, Burdens of Proof, Movant Persuasion & Proof, Motions for Summary Judgment, Appropriateness, Genuine Disputes, Standards of Review, Substantial Evidence, Sufficiency of Evidence, Antitrust & Trade Law, Price Discrimination, Competitive Injuries, Business & Corporate Law, Distributorships & Franchises, Termination, Good Cause, Business & Corporate Compliance, Contracts Law, Standards of Performance, Discharge & Termination, Energy & Utilities Law, Oil & Petroleum Products, Gasoline Fuels, Gasoline Dealers & Distributors, Utility Companies, Service Terminations, Trials, Bench Trials, Contracts Law, Contract Interpretation, Franchise Relationships, Franchise Agreements, Governments, Legislation, Interpretation, Robinson-Patman Act, Claims, Private Actions, Remedies, Coverage, Clayton Act, Damages, Regulated Practices, Prioritizing Resources & Organization for Intellectual Property Act, Causes of Action, Fiduciary Duties, Good Faith & Fair Dealing, Labor & Employment Law, Employment Contracts, Conditions & Terms