State Ex Rel. Ford Motor Co. v. Bacon

*645RONNIE L. WHITE, Judge,

dissenting.

I respectfully dissent. The analysis the principal opinion uses to arrive at its conclusion frankly mystifies me. The principal opinion is willing to concede that Ford Credit operates under Ford’s direction and control when it provides financing to Ford dealers and customers and that it does so for the purpose of selling Ford cars. Even though federal courts recognize this relationship for what it is — an agency — the principal opinion says that it is not an agency because “Ford Credit has no power to alter legal relations between Ford Motor Company and third parties.” I have no idea what the principal opinion means by this, since the majority accepts that Ford may incur liability to third parties based upon actions taken by Ford Credit, which surely “alters the legal relations” between Ford and those parties. The counterintuitive results produced by the principal opinion’s undisclosed test for determining whether a purported agent has the power to change a principal’s legal status as to third parties are less puzzling than the fact that the majority reaches the question. Although it was required to show that Ford Credit had “no power” to act as its agent, Ford offered evidence about only a portion of the activities Ford Credit conducts on its behalf. Ford failed even to meet its burden of production (much less proof) that Ford Credit was not operated as its office or agent for the transaction of Ford’s usual and customary business, and respondent acted well within his jurisdiction in refusing to transfer venue.

The burden of production and of proof were on Ford to demonstrate that venue was improper.1 To prevail, Ford had to show that it did not “have or usually keep an office or agent for the transaction of [its] usual and customary business” in Greene County.2 Instead of offering detailed evidence regarding its relationship with Ford Credit, evidence from which one could conclude that Ford Credit did not act as Ford’s agent, Ford offered just two brief affidavits that would have to be described as self-serving, if they were not so incomplete.

The first affidavit, not discussed in the principal opinion, is that of a low-level Ford employee and seeks to establish that Ford is only in the automotive manufacturing business and is not in the business of providing financial services. Plaintiffs demolished this claim, showing that Ford consistently holds itself out to the public, its shareholders and to the Securities and Exchange Commission as one of the “largest providers of financial services in the United States.” Ford reported more than $ 21 billion in revenue and $ 1 billion in profits from its financial services business in 1994, a business it conducts entirely through Ford Credit and other similar operating units. Although the principal opinion complains that I refuse to recognize the independent corporate existence of Ford Credit, that complaint might more accurately be directed at Ford, which is perfectly willing to ignore the supposed separation between its business and that of Ford Credit when it suits its purposes to do so.

Instead of explaining how it is even theoretically possible for Ford to operate a twenty billion dollar financial services business and yet have neither offices nor agents for the conduct of that business, the *646principal opinion limits itself to the more abstruse question of whether Ford Credit has the power to alter the legal relations between Ford and third parties. The principal opinion says that Ford has proven that Ford Credit lacks this power because it has shown that Ford is not a party to Ford Credit’s floorplan or customer financing arrangements and is not a party to an agreement with Ford “restricting or conditioning” those contracts.

These facts are artfully stated to disguise the real substance of the relationship between the companies. Ford and Ford Credit are subject to an agreement under which Ford Credit is prohibited from reducing the level of financing it provides to dealers, in return for which, Ford agrees to completely guarantee the profitability of Ford Credit. Thus, while Ford may not restrict Ford Credit’s ability to offer financing to Ford dealers, it does, in fact, require that financing, a fact that is equally indicative of control. The federal courts have noted that, as a captive finance company, Ford Credit gives Ford tremendous leverage over its dealers, and “it would be unrealistic to suppose that a wholly owned subsidiary working to facilitate the parent’s distributive activities would act other than to promote the desires of its parent.” 3 Recognizing the reality of the relationship, federal courts have rejected the idea that Ford Credit is an agent of Ford only if Ford is a party to a financing contract. Instead, to show an agency relationship, a party need not show that Ford was a party to a particular transaction, but only that Ford Credit provided financing to facilitate the sale of Ford vehicles.4

Under this doctrine, Ford Credit’s provision of financing to Ford dealers, as required by its contract with Ford, subjects Ford to various duties under the Automobile Dealers Day in Court Act5 and exposes Ford to liability under the Act if it fails to carry out those duties. Even if, as the principal opinion holds, principles of federal law are so repugnant to Missouri agency law as to be unworthy of consideration, the federal determination has real consequences nevertheless. Even if Ford Credit would not otherwise be Ford’s agent, the fact Ford can held liable for the acts of Ford Credit in extending financing means that Ford Credit unmistakably has the power to alter the legal relationship between Ford and its dealers. The principal opinion does not offer any definition of what it means to have the power to alter a principal’s legal relations, much less one that would exclude exposing the principal to liability at federal law. It is not necessary, as the principal opinion suggests, to ignore Elson v. Koehr to find that Ford Credit is Ford’s agent. Rather, the fact that federal courts treat Ford Credit as an agent means that Ford satisfies the “power to alter legal relations” prong of the Elson test, and that Ford Credit operates as Ford’s agent with respect to its financing activities.

The principal opinion can only reach this question, however, because it simply ignores Ford’s failure to offer any evidence regarding whether it acts as Ford’s agent in conducting the many other activities it performs for Ford. These include making loans to Ford affiliates, financing receivables of Ford and its subsidiaries, and managing the activities of Ford subsidiaries, such as Ford’s captive insurance busi*647ness, American Road. Ford’s affidavits do not mention these activities, and therefore cannot logically be read to prove that Ford Credit lacks the power to affect Ford’s legal rights and obligations in connection with these activities, activities which would seem difficult to perform without such authority.

The summary analysis and rationale the principal opinion employs here betrays, I think, the real basis for its decision: an ingrained hostility to the idea that plaintiffs should have choices regarding where to bring their lawsuits. Because this is no more than a naked policy choice (and one this Court has previously said should be made by the legislature), the principal opinion (as in other recent cases) does not acknowledge that it now construes venue statutes strictly to restrict plaintiffs’ choice of venue.7 Today’s decision shows that this Court will countenance the fiction that a corporation that actively conducts its business through subsidiaries is no more than a passive investor in those subsidiaries, giving corporations an incentive to manipulate their corporate structure in order to secure favorable venue. I would think that the Court would, if it was concerned about forum shopping, be as eager to discourage defendants from the practice as it is plaintiffs.

Ford chose to present the court with what is, at best, an incomplete description of its relationship with Ford Credit. Because the details of that relationship are exclusively within Ford’s control, the trial court would have been entitled to presume that this evidence would have been unfavorable to Ford, even if Ford didn’t bear the burden of production and of proof on this point. In any case, plaintiffs established beyond any serious doubt that Ford Credit provides financing at Ford’s direction for the purpose of facilitating the sale and distribution of vehicles manufactured by Ford. I would hold, as the federal courts have done, that this is a sufficient showing to treat Ford Credit as Ford’s agent, and, therefore, to establish venue in Greene County.

I would quash the preliminary order.

. See Rule 55.27(a)(3) (2000); State ex rel. Johnson v. Griffin, 945 S.W.2d 445, 446 (Mo. banc 1997); State ex rel. Breckenridge v. Sweeney, 920 S.W.2d 901, 902 (Mo. banc 1996); State ex rel. Clark v. Gallagher, 801 S.W.2d 341, 344 (Mo. banc 1990).

. Section 508.040, RSMo 2000.

. Colonial Ford v. Ford, 592 F.2d 1126, 1129 (10th Cir.1979).

. See id.; DeValk Lincoln Mercury, v. Ford, 550 F.Supp. 1199, 1202 (N.D.Ill.1982).

. 15 U.S.C., sec. 1221, et. seq.

. See State ex rel. Linthicum v. Calvin, 57 S.W.3d 855 (Mo. banc 2001); State ex rel. Miracle Rec. Equip. Co. v. O’Malley, 62 S.W.3d 407 (Mo. banc 2001); State ex rel. Landstar Ranger, Inc. v. Dean, 62 S.W.3d 405 (Mo. banc 2001).