• Issues of Fact Preclude Summary Judgment on Claims for Breaching Auto Dealer Agreement: Legend Autorama, Ltd. et al v. Audi of Amer., Inc. et al.
  • August 12, 2011 | Author: Aaron E. Zerykier
  • Law Firm: Farrell Fritz, P.C. - Uniondale Office
  • In a July 14, 2011 decision by Justice Emerson the court granted partial summary judgment dismissing claims against an automotive executive but finding that issues of fact precluded dismissal against an automotive manufacturer. In 2007 the automotive manufacturer created a new automotive dealership in Suffolk County, that bordered the market area assigned to two existing automotive dealerships. The two existing dealership sued the manufacturer and one of its executive alleging claims for, among other things, breaches of fiduciary duty and breach of contract. The defendants moved for summary judgment.

    The court granted summary judgment dismissing the tortuous interference and aiding and abetting breach of fiduciary duty claims against the automotive executive. The court found that generally a corporate officer cannot be held liable for his actions on behalf of the corporation if he is acting in good faith; and while there are exceptions to that rule, the facts adduced during discovery did not demonstrate that the executive acted in bad faith, committed an independent tort or personally benefitted from his actions.

    The court denied summary judgment dismissing the breach of fiduciary duty claim against the auto manufacturer, finding that there were issues of fact concerning the nature and extent of the manufacturer’s relationship with the plaintiff dealership which may have created a fiduciary relationship which would not otherwise ordinarily exist. The court further found that the breach of fiduciary duty claim was not duplicative of the breach of contract claim because a fiduciary duty may arise independent of the contract (which may have happened here). The court also denied summary judgment dismissing the breach of contract and breach of the implied covenant of good faith and fair dealing, because the auto manufacturer had discretion in how it treated the plaintiff dealerships and there was an issue of fact whether the manufacturer exercised its discretion in bad faith.

    Legend Autorama, Ltd. et al v. Audi of Amer., Inc. et al., Sup Ct, Suffolk County, July 14, 2011, Emerson, J, Index No. 38667/08.