Bayshore Ford Truck Sales, Inc., Heint-zelman’s Truck Center, Inc., LJL Truck Center, Inc., Peach State Ford Truck Sales, Inc., and Valley Ford Truck Sales, Inc. (the “Dealers”), appeal from the district court’s award of summary judgment to Ford Motor Company on a breach of contract claim. The Dealers also appeal an earlier order of the district court denying a motion to disqualify Ford’s local counsel, the law firm of Sutherland Asbill & Brennan LLP.
The Dealers all became authorized Ford dealers between 1973 and 1987 by signing two franchise contracts with Ford, one to sell medium trucks and one tо sell heavy duty trucks.
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The Dealers competed amongst themselves, as well as other Ford and dealers of other brands, on a nationwide basis. In its sales system, Ford manufactured its truck platform, essentially a bare chassis, at a Kentucky plant; after delivery to a dealership, the trucks were subsequently modified and customized to suit the particular needs of their purchasers. Authorized' dealers purchase these trucks from Ford at wholesale prices established by the company. Originally, these wholesale prices were published in bulletins distributed uniformly to all Ford dealеrs. In the early 1980s, however, Ford established a new pricing system for
The dispute between the parties revolves around the terms of the Sales and Service Agreements, Ford’s standard contract with its medium and heavy-duty truck dealers. Paragraph 10 of the Ford Truck and Heavy Duty Truck Sales and Service Agreement reads as follows: 3
Sales of COMPANY PRODUCTS by the Comрany to the Dealer hereunder will be made in accordance with the prices, charges, discounts and other terms of sale set forth in price schedules or other notices published by the Company to the Dealer from time to time in accordance with the applicable HEAVY DUTY TRUCK TERMS OF SALE BULLETIN or PARTS AND ACCESSORIES TERMS OF SALE BULLETIN. Except as otherwise specified in writing by the Company, such price,, charges, discounts and terms of sale shall be those in effect, and delivery to the Dealer shall be deemed to have been made and the order deemed to have been filled on the date оf delivery to the carrier or the Dealer, whichever occurs first. The Company has the right at any time and from time to time to change or eliminate prices, charges, discounts, allowances, rebates, refunds or other terms of sale affecting COMPANY PRODUCTS by issuing a new HEAVY DUTY TRUCK or PARTS AND ACCESSORIES TERMS OF SALE BULLETIN, new price schedules or other notices. In the event the Company shall increase the DEALER PRICE for any COMPANY PRODUCT, the Dealer shall have the right to cancel, by notice to the company within ten (10) days after receipt by the Dealer of notice of such increase, any orders for such product plaсed by the Dealer with the Company prior to receipt by the Dealer of notice of such increase and unfilled at the time of receipt by the Company of such notice of cancellation.
Rll-13. While this language is common to both the regular truck and heavy duty
The Company shall make available to the Dealer price schedules for HEAVY DUTY TRUCKS for distribution to Authorized Ford Truck dealers in the DEALER’S LOCALITY, or the Company may directly distribute such price schedules to such dealers. Such price schedules shall not make reference to HEAVY DUTY TRUCK deposits, allowances or other programs for which Authorized Ford Truck dealers are not eligible.
R12-14. In the Heavy Duty Truck Sales and Service Agreement, this language is simply an additional paragraph inserted at the end of Paragraph 10. The parties dispute whether Ford’s Appeal-Level CPA program constitutes a proper means of establishing and publishing prices to its authorized dealers under the terms of the Sales and Service Agreement.
The allegations of breach of contract also extend to a separate provision of the Sales and Service Agreement, Paragraph 30, which governs notices.
Any notice required or permitted by this agreement, or given in connection herewith, shall be in writing and shall be given by personal delivery or by first-class or certified or registered mail, postage prepaid. Notices to the Company shall be delivered to or addressed to the District Sales Manager of the area in which the Dealer is located except notices given by the Dealer either to the Policy Board or pursuant to the Arbitration Plan. Notices to the Dealer shall be delivered to any person designated in paragraph F(ii) of this agreement or directed to the Dealer at the Dealer’s principal place of business as described herein.
R12-30. The parties disagree as to whether Ford’s use of facsimile to transmit price information in its Appeal-Level CPA program violates this provision of the contract, and further dispute whether the Dealers have waived this argument by their actions.
The contract disрutes are not the only points of contention between Ford and the Dealers, as the parties also contest the propriety of Ford’s representation by the law firm of Sutherland Asbill & Brennan LLP (“Sutherland”). Mr. Charles Ganz joined Sutherland in 1998 as a lateral partner. When Mr. Ganz moved to Sutherland, his retained clients, Peach State Ford and owner Tom Reynolds, became Sutherland clients. As counsel for Peach State and Mr. Reynolds, Mr. Ganz had maintained Peach State’s corporate minutes, filed materials with regulatory agencies, and prepared trade name registrations. Mr. Ganz had also maintained Peach State’s corporate minutes and served as its assistant secretary, a position which entailed updating corporate minutes and attesting to corporate documents. After joining Sutherland, Mr. Ganz and other firm lawyers aided Mr. Reynolds and his wife with estate matters.
Sutherland had a long-standing relationship with Ford predating Mr. Ganz’ arrival at the firm, having represented Ford for more than thirty years. Accordingly, Sutherland represented Ford in the instant case, which was filed by the Dealers on July 1, 1999. Once the potential conflict of interest was discovered, Peach State and Reynolds refused to grant Sutherland’s request to waive any conflict. Sutherland subsequently released Peach State and Reynolds as clients in November 1999. Peach State sought Sutherland’s disqualification as Ford’s local counsel, and the district court held a hearing on the motion on December 8, 1999. After the
I. Breach of Contract: Pricing System
At the heart of the Dealers’ breach of contract claim is their allegation that Ford violated its contrаctual obligations to its dealers when it instituted its new pricing scheme. The Dealers contend that Ford had an obligation to sell its trucks at prices previously published to all authorized truck dealers. Ford’s new pricing system, specifically the individualized Appeal-Level CPA program, allegedly violates this obligation. The Dealers also contend that faxing an individualized, transaction-specific price to one dealer, as is normal procedure during an Appeal-Level CPA negotiation, fails to meet Ford’s obligation to sell its product at only pre-published рrices.
When the language of a contract is clear and unambiguous, then the contract is not open to construction or interpretation and must simply be enforced as written.
Equitable Life Assurance Soc’y of the United States v. Poe,
Paragraph 10 governs prices and charges under the contract, and states that Ford will sell its products to the dealer in price schedules or notices published in accordance with the Heavy Duty Truck Terms of Sale Bulletin or Parts and Accessories Terms of Sale Bulletin.
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The contract further provides that Ford has the right to change its prices by issuing “a new HEAVY DUTY TRUCK or PARTS AND
Even accepting Ford’s posited interpretation as a reasonable interpretation of paragraph 10, however, we cannot construe the contract to support only Ford’s intеrpretation to the exclusion of other interpretations. The Sales and Service Agreement requires prices to be set forth in schedules or notices in accordance with either the Heavy Duty Truck or Parts and Accessories Terms of Sale bulletins. Section 1(g) of the contract defines the Heavy Duty Truck Terms of Sale Bulletin as “the latest HEAVY DUTY TRUCK TERMS OF SALE BULLETIN and amendments thereto furnished to the Dealer from time to time by the Company setting forth the terms of sale and ordering procedures applicable to sales of HEAVY DUTY TRUCKS to Authorized Ford Heavy Duty Truck dealers.” R12-2 (emphasis added). Similarly, section 1(h) also describеs the Parts and Accessories sales bulletin as a document setting forth terms of sale for all authorized dealers. Id. Thus, while each individual dealer contract may only impose obligations on Ford with respect to that dealer, the contractual language suggests that one of Ford’s obligations to the individual dealer is to maintain and distribute bulletins which contain sale information pertinent to all dealers. The contract consistently couples the price schedules and notices with these dealer-wide bulletins and provides that price schedules and notices are to be published in accordance with these dealer-wide bulletins. Mindful of our obligation to consider every word and term in the agreement, we believe a reasonable interpretation of paragraph 10 would be to require Ford to publish its price schedules and other notices in accord with the truck and parts bulletins: containing sale information applicable to all dealers, and published to all dealers. Thus, we cannot conclude that the language of Paragraph 10 admits of no interpretation other than Ford’s suggestion that the cоntract only requires it to deliver to each individual dealer the prices at which Ford will sell its products to that dealer. At the very least, the language of the contract is ambiguous as to whether price schedules and “other notices” published in accordance with dealer-wide bulletins could ever be in nature dealer-specific.
The additional language in the Heavy Duty Truck contract creates further ambiguity. The Heavy Duty Truck contract, unlike the Truck contract, imposes an additional obligation upon Ford to “make available to the Dealеr price schedules for HEAVY DUTY TRUCKS for distribution to Authorized Ford Truck dealers in the DEALER’S LOCALITY, or the Company may directly distribute such price schedules to such dealers.” This contractual language contemplates, at least with regard to Ford’s heavy truck dealerships, that Ford would prepare and distribute pricing schedules that were applicable to all dealers in a given locality, not just the individual dealer named in the contract. From this provision, then, one reasonable interpretation of the contract would seem to require Ford to sell its products at pricеs applicable to all dealers in a given locality. Given that the preceding portion
II. Breach of Contract: Notice
In addition to the dispute over Paragraph 10 of the Sales and Service Agreement, the parties dispute whether Ford also breached Paragraph 30 of the Agreement, which requires Ford to send “[a]ny notice required or permitted by this agreement, or given in connection herewith ... in writing and ... by personal delivery or by first-class or certified or registered mail, postage prepaid.” Rll-30. It is the Dealers’ contention that in faxing its Appeal-Level CPA notices, Ford violated its contractual obligation to send such notices either by personal delivery or mail. The district court, however, concluded that even if Ford were in breach of Paragraph 30, this breach was excused by the Dealers’ waiver of any objection to this form of notice.
Under Michigan law, waiver of contractual rights can be shown “by proof of express language of agreement or ineffably еstablished by such declaration, act, and conduct of the party against whom it is claimed as are inconsistent with a purpose to exact strict performance.”
H.J. Tucker & Associates, Inc. v. Allied Chucker & Engineering Co.,
III. Disqualification of Counsel
The Dealers also contend that the district court erred in denying their motion to disqualify Sutherland from representation of Ford due to a conflict of interest. The Dealers contend that not only was there an actual conflict of interest, but also an appearance of impropriety from Sutherland’s simultaneous representation of defendant Ford, plaintiff Peach State Ford, and Peach’s owner, Tom Reynolds, while this case was pending in the district court. The district court found that Sutherland had represented multiple clients simultaneously, suggesting disqualification might be proper under Disciplinary Rule 5-105 of the State Bar of Georgia,
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but determined that Sutherland’s prompt withdrawal from representation of Peach State and Reynolds, whom it had represented in unrelated matters, rendered disqualification improper. We review the district court’s findings of fact for clear error and carefully examine
de novo
the district court’s application of ethical standards.
Schlumberger Technologies, Inc. v. Wiley,
The. Local Rules of the United States District Court for the Northern District of Georgia require attorneys appearing before it to comply with the court’s specific rules of practice, the Code of Professional Responsibility and Standards of Conduct contained in the State Bar of Georgia’s Rules and Regulations, and judicial decisions interpreting these rules and standards. L.R. 83.1(C), N.D. Ga. Directory Rule 5 — 105(C) of the State Bar of Georgia provides that a lawyer may only represent multiple clients “if it is obvious that he can adequately represent the interest of each and if each consents to the representation after full disclosure of the possible effect of such representation
While the district court found Sutherland in violation of DR 5-105, the court found that it was bound by our holding in
Tipton v. Canadian Imperial Bank of Commerce,
As in
Tipton,
Mr. Ganz, who represented Peach State and Reynolds in corporate and estate matters, testified that he did not share information about his clients with those attorneys who handled Ford’s defense, and certainly not confidential information.
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Thus, after carefully review
For the reasons stated above, we find that the district court improperly granted summary judgment to Ford on the breach of contract claim and remand to the district court for further proceedings in conformity with our opinion. We nevertheless affirm the district court’s findings that the Dealers have waived any argument that Ford breached paragraph 30 of the franchise contract and its order denying the motion to disqualify Sutherland as defense counsel.
AFFIRMED IN PART, REVERSED IN PART, AND REMANDED.
Notes
. The parties agree that the program in dispute applied equally to medium and heavy duty trucks. Accordingly, we will not distinguish between the two types of products and simply refer to “trucks” throughout this opinion.
. Originally Sales Advantage CPA was called Rainbow Schedule CPA, but there are no distinctions between the two CPA programs that are material to this case. Whether called Sales Advantage or Rainbow Schedule CPA, the Dealers do not allege that this particular facet of CPA breaches the franchise contract.
. In the Ford Truck Sales and Service Agreements, the term ‘'HEAVY DUTY TRUCK” is replaced with the term ‘‘TRUCK.” With an exceptiоn discussed below, the two contracts are materially identical in terms.
. The Sales and Service Agreements between Ford and the Dealers contain a Michigan choice-of-law provision. The district court found that this provision was enforceable and neither party disputes this finding on appeal.
. Again, the relevant terms in the truck and heavy duty truck contracts are identical. For convenience, we will utilize the Heavy Duty Truck contract throughout this analysis.
. At trial, we anticipate Ford may well raise the issue of waiver, which to this point has only been raised with regаrd to paragraph 30 of the Sales and Service Agreement, discussed infra.
. We recognize that the Dealers contend that this is an adhesion contract, wherein power imbalances rendered the Dealers unable to protest Ford's failure properly to deliver its notices to its authorized dealers. We have not found, however, that Michigan law treats the doctrine of waiver differently when contracts of adhesion are at issue. Further, given the facts before us, we cannot see how these franchise dealership contracts could be considered contracts of adhesion. A party seeking to set aside a contract as an adhesion contract must show that there were no real alternatives to the contractual provisions, considering such factors as relative bargaining power, economic strength, and any existing alternatives.
General Motors Corp. v. Paramount Metal Products Co.,
. Again, the Dealers contend that they were controlled by the unequal bargaining position in the dealership relationship, and that the reason that they failed to demand Ford's specific performance of the contractual terms creates an issue of fact. As we have аlready discussed, however, we do not see how the facts support an inference that this was an adhesion contract.
. DR 5-105 is entitled "Refusing to Accept or Continue Employment if the Interests of Another Client May Impair the Independent Professional Judgment of the Lawyer.” This section was in effect at all relevant times in the instant claim, although Georgia has subsequently adopted new Rules of Professional Conduct.
. The Dealers argue that Sutherland's continued representation of Ford also created the appearance of impropriety, a situatiоn which justified disqualification. While it is true that proof of actual impropriety is not demanded before disqualifying counsel under this theory, "there must be at least a reasonable possibility that some specifically identifiable impropriety did in fact occur.”
Woods v. Covington County Bank,