Opinion ID: 199925
Heading Depth: 3
Heading Rank: 2

Heading: Ford's Conduct

Text: 47 As to Ford's conduct behind the scenes, RFS maintains that the district court erred in ignoring substantial evidence of coercion by Ford in obtaining RFS's voluntary termination and release. 6 RFS argues that Ford, knowing that RFS was on its last legs financially, refused to allow the sale to RLM back in 1995, forced RFS to exercise the buyback option in 1998 by allegedly telling it that Ford would not go forward with the approval of the Granite Ford sale unless RFS executed the letter of termination and the release, 7 and underwrote $325,000 of the capital requirement of the Granite Ford dealership, giving Ford leverage to require that Granite Ford insist on including the buyback in the asset sale. Since RFS had no choice but to opt for the buyback option, it also had no choice but to sign the release that ostensibly eliminated its rights to sue for Ford's failure to approve the earlier 1995 sale. 48 Ford responds that any constraints operating on RFS to execute the separate release resulted entirely from RFS's own actions in structuring the sale of the dealership to Granite. The asset purchase agreement between RFS and Granite sold Granite the buyback option as an asset of the dealership. 8 Granite would have been within its rights to withdraw from the sale if RFS did not provide that option. Thus, insofar as RFS was in any way required to sign the release, Ford maintains that this was the direct result of RFS's promise to Granite, not a requirement imposed by Ford. See Schmitt-Norton Ford, 524 F.Supp. at 1104 (finding that [e]ven assuming that at the time they signed the release [the plaintiffs] had no alternative, this came about because of the way they structured the sale ..., not because of Ford's actions). 49 Moreover, Ford points out that Chip Albee, RFS's Rule 30(b)(6) corporate designee, admitted in his deposition that RFS signed the release because he had concluded that the release was unenforceable, not because of any coercion by Ford; Albee later made the same statement in paragraph 28 of his affidavit attached to the plaintiff's opposition to summary judgment. It is a well settled point of law that signing a valid release in the belief that it is unenforceable nonetheless creates a binding release. See, e.g., Fortino v. Quasar Co., 950 F.2d 389, 395 (7th Cir.1991); Runyan v. Nat'l Cash Register Corp., 787 F.2d 1039, 1044 (8th Cir.1986); Smith v. City of Flint Sch. Dist., 80 Mich.App. 630, 633, 264 N.W.2d 368 (1978). 50 As to RFS's claim that the asset purchase agreement and the assignation of RFS's termination benefits to Granite Ford were somehow a sham, Ford maintains that RFS has no evidence to suggest that Ford is accountable for the agreement between RFS and Granite Ford. More generally, Ford argues that RFS has failed to articulate any clear account of how Ford's relationship with Granite Ford in any way has an effect on the validity of RFS's release and the Ford-RFS agreement. 51 We agree with Ford. Although RFS has advanced several theories of how Ford's actions may have constrained it to opt for the repurchase option and sign the general release, it has not substantiated these theories with sufficient evidence to raise a triable coercion or duress claim to invalidate the release. At a minimum, a claim of coercion or duress requires that the alleged pressure result from the other party's conduct, not from other factors, and that the wrongful pressure occurred in sufficient measure to overwhelm the coerced party's independent judgment. 52 Here, RFS's claims of coercion all founder on a core point: the causation requirement, i.e., proving that the constraints on its options result from the defendant's conduct. Insofar as RFS claims that Ford's knowledge of its shaky financial status renders the release provision coercive, it is axiomatic that one party's dire financial straits alone are insufficient to invalidate a contract on grounds of duress or economic coercion. 9 See, e.g., French v. Shoemaker, 81 U.S. (14 Wall.) 314, 332, 20 L.Ed. 852 (1871) (straitened circumstances insufficient to negate voluntariness of consent); Selmer Co. v. Blakeslee-Midwest Co., 704 F.2d 924, 928 (7th Cir.1983) (Posner, J.) (The mere stress of business conditions will not constitute duress where the defendant was not responsible for the conditions.); Mobility Sys. & Equip. Co. v. United States, 51 Fed. Cl. 233, 237 (2001) (same). In any case, there is no indication in the record that RFS was in any such straits when it originally entered into the Sales and Service Agreement, which contained the option provisions, with Ford in 1980. 53 Moreover, the record does not reflect that RFS's financial status per se drove it to opt for the repurchase provision in 1998. Rather, as already discussed above, RFS needed or wanted to include the repurchase right as an asset in the sale to Granite Ford, based on the agreed-to terms of that sale. Insofar as RFS now alleges that Ford was the invisible hand on the scales of those negotiations, these allegations are totally unsubstantiated in the record. The fact that Ford provided substantial financing to Granite Ford, standing alone, does not in any way suggest that Ford forced Granite Ford to insist on the repurchase option as a way of tightening the screws on RFS. RFS's allegations and speculation here fall far short of carrying its burden to survive summary judgment.