Hughes Automotive Co. v. Polyglycoat Corp.

Wilner, J., delivered the opinion of the Court. In May, 1977, appellant entered into an agreement with appellee Polyglycoat for the distribution of Polyglycoat’s products. 1 Under this agreement, appellant was made the ⁸¹ exclusive distributor of those products in the Washington, Baltimore, Delaware area, including, by specific interlineation, certain cities and counties in Northern Virginia (Fairfax, Loudoun, and Arlington Counties and the cities of Woodbridge and Manassas), subject to his producing a specified level of business. The agreement provided, among other things, that appellant’s territory would not be "reduced, enlarged, or otherwise changed” without his consent, that the agreement would remain in effect "so long as neither party is in default or has breached any of [its] terms ...,” and that, so long as the agreement remained in effect and appellant continued to perform his obligations, "no other different person, firm or corporation will be granted the franchise of selling” Polyglycoat’s products "in the territory herein granted to [appellant]” without appellant’s consent. Upon execution of the agreement, appellant proceeded to subdivide his territory, employ salesmen, and solicit business.

In the late fall of 1977 appellant began receiving reports, which he confirmed, that a company known as Audiovox, Inc., through its subsidiary Audiovox Mid-Atlantic Corporation, was also selling Polyglycoat products in his territory — particularly in the Northern Virginia cities and counties — in competition with appellant and in apparent violation of appellant’s distributorship agreement with Polyglycoat. In December, 1977, he sought judicial relief by filing this action in the Circuit Court for Montgomery County against Polyglycoat, Audiovox, and the Audiovox subsidiary. In his amended bill of complaint, appellant charged, among other things: (1) "That the defendants, beginning on or about November 1,1977, without just cause and with malicious intent, held meetings and discussions, laid plans and conspired to deprive plaintiff of its contractual rights with the intention of arranging the termination of plaintiffs dis ⁸² tribution rights for Northern Virginia under the agreement with defendant Polyglycoat Corporation, so that the territory could be transferred to defendant Audiovox, Inc. and its distributor of goods in this territory, defendant Audiovox Mid-Atlantic Corporation.”; (2) "That in furtherance of said conspiracy, on or about November 1, 1977, defendants entered into a contract granting defendant Audiovox, Inc. through its local distributor Audiovox Mid-Atlantic Corp. a distributorship for the entire State of Virginia in direct, absolute and blatant contravention and breach of defendant Polyglycoat’s contract with plaintiff.”; (3) That, in furtherance of the conspiracy, Audiovox and its subsidiary have in fact intentionally interfered with appellant’s business relationships by claiming to be Polyglycoat’s distributor in Northern Virginia and by attempting to sell Polyglycoat products in Maryland; (4) That, also in furtherance of the conspiracy, Polyglycoat has threatened unilaterally to eliminate Northern Virginia from appellant’s territory. Upon these allegations, appellant asked for injunctive relief and damages.

Eventually, after a goodly exchange of pleadings and discovery, appellant dismissed the action against Audiovox and its subsidiary; his casé against Polyglycoat, the only remaining defendant, came to trial in February, 1982. , At the conclusion of the live testimony presented on its behalf (after four days of trial), appellant sought leave to amend his amended bill of complaint, by interlineation, to clarify "that the allegations set forth therein include a claim against [Polyglycoat] for breach of contract.” As explained in a later memorandum, appellant’s position was that the bill of complaint already included such a claim, but, in light of ⁸³ certain doubt cast upon that by counsel for Polyglycoat, he desired to make it clear beyond question. The court denied the motion; according to appellant, it was on the basis that the bill did not include such a claim and that Polyglycoat would be unduly prejudiced by adding one at that late date. 2 By stipulation, certain depositions taken pretrial were then admitted into evidence, some on behalf of appellant, one on behalf of Polyglycoat. At that point, Polyglycoat moved, pursuant to Maryland Rule 535, to dismiss the complaint, and appellant