Darling's Bangor Ford v. Ford Motor Co.

CourtSuperior Court of Maine
DecidedNovember 26, 2003
DocketHANap-03-14thru16
StatusUnpublished

This text of Darling's Bangor Ford v. Ford Motor Co. (Darling's Bangor Ford v. Ford Motor Co.) is published on Counsel Stack Legal Research, covering Superior Court of Maine primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Darling's Bangor Ford v. Ford Motor Co., (Me. Super. Ct. 2003).

Opinion

STATE OF MAINE SUPERIOR COURT

HANCOCK, ss CIVIL ACTION DOCKET No. AP-2003-14 AP-2003-15 AP-2003-16 bee AMV WHAM WY elelete DARLING’S BANGOR FORD, : { Plaintiff | pENOESOCT COUNTY: ENCES | v. ) DECISION AND ) ORDER FORD MOTOR COMPANY, ) ) Oa wont ) Defendant ) DEL & 2003

This matter is before the Court on the Plaintiff’s, Darling’s Bangor Ford (herein, “Darling’s) on appeal pursuant to Rule 76D of the Maine Rules of Civil Procedure from judgment entered by the District Court on April 18, 2003, in favor of the Defendant, Ford Motor Company (herein, “‘Ford’’). Darling’s seeks recovery from Ford for warranty work on three small claims.’

Background Darling’s, an automobile dealer/franchisee, and Ford, an automobile manufacturer/franchisor, are parties to a Sales and Services Agreement (herein, “‘Agreement”)’, under which Darling’s is authorized to sell and service Ford vehicles. Under this Agreement, Darling’s is required to repair Ford vehicles under warranty from Ford at no cost to the customer. According to the terms of the Agreement, warranty

repairs are to be performed in accordance with the warranty and the applicable provisions

' Darling’s seeks to recover damages for warranty work it recovered on three separate vehicles. In AP-03- 14, Darling’s replaced all eight injectors in the diesel engine of a large truck. In AP-03-15 and AP-03-16, Darling’s replaced control modules in the power train of an SUV and a Ranger pick-up truck.

2 ‘See Ford Sales and Service Agreement, dated September 20, 1989, and attached as Defendant’s Exhibit 4. of the Warranty and Policy Manual (herein, “Manual’’).? The Agreement also provides that Darling’s claims for reimbursement from Ford for warranty work done at no charge to the customer must be submitted in accordance with the Manual.

The Manual states that “[dJealers who do not administer the Warranty and Policy program effectively may be placed on. . . Prior Repair Approval.” See Ford’s Warranty and Policy Manual, October 2001, p. 8-3, attached as Darling’s Exhibit 948-2. The Manual also states that certain types of repairs and claims require prior approval, including “Items specified to the dealer by the Company (i.e., if dealer is on a dealer panel).” Id. at 1-1. The Manual specifically states:

Ford Motor Company has established a number of programs involving

groups of dealerships to assist in early vehicle concern identification or

warranty cost control (examples include the RTDA program and Digital

Imaging). These programs may require dealerships to obtain prior

approval before initiating certain repairs. Failure to obtain prior approval

may result in the denial of claim payment.

Id. at 1-3 (emphasis added).

By statute, Ford is required to reimburse Dealers, such as Darling’s for these wasranty repairs. Ford is obligated to pay Darling’s for labor involved in the warranty work at the retail rate customarily charged by Darling’s to all of its customers. Ford is required to compensate Darling’s for parts, on large vehicles by an amount that “adequately and fairly” compensates Darling’s and for smaller vehicles, the retail rate

customarily charged by Darling’s to all of its customers. See 10 M.R.S.A. §1176; see

also Findings of Fact and Conclusions of Law of the Bangor District Court (Russell, J.).

° The Manual, in turn, states that it is “a supplement to and an extension of the Sales and Service Agreement and the warranty statements.” See Ford’s Warranty and Policy Manual, October 2001, Introduction, §1, which is attached as Darling’s Exhibit 948-3. Ford uses a nationwide computerized system to reimburse Darling’s for parts and labor utilized for warranty repairs.

At issue is a Ford Program, Real Time Diagnostic Assistance program (herein, “RTDA”), which the Manual makes reference to’, and which Darling’s was placed under for Diesel Engine Injectors on 1999-2002 model trucks, as well as for powertrain control modules in certain vehicles. Under this program, Ford gathers information from a group of dealers regarding vehicles brought in for repairs that implicate particular vehicle components, “in order to improve dealers’ problem-diagnosis and prevent unnecessary replacement of those components when repair might be a viable alternative.” Ford’s Brief at p. 4. Dealers are selected for the RTDA program based on their having a record of replacing an abnormally high number of the subject components. Under RTDA, for a specific period of time dealers are required to obtain approval from RTDA personnel prior to replacing a subject component, and lack of such approval will result in rejection of a reimbursement claim.

Ford informed Darling’s by letter, dated August 10, 2001, that they were being placed on an RTDA panel for Diesel Engine Injectors on 1999-2002 trucks. Ford informed Darling’s by letter, dated November 30, 2001, that they were being placed on an RTDA panel for powertrain control modules in certain listed vehicles, including 2001 Ford Rangers and 2002 Ford Explorers. Both letters contained a statement notifying Darling’s that approval from RTDA program personnel must be sought prior to replacement of the parts referenced supra, and that lack of such approval could result in

the rejection of a reimbursement claim.

* See Ford’s Warranty and Policy Manual, October 2001, p. 1-3, attached as Darling’s Exhibit 948-2. On March 14, 2002, Darling’s replaced all eight diesel engine injectors on a 1999 truck, without first calling RTDA program personnel for prior approval. Ford repeatedly rejected Darling’s’ claims for reimbursement on this repair for lack of an RTDA code. Subsequently, Darling’s obtained an RTDA code for this claim,> but Ford rejected the claim in light of “fuel-contamination concerns.””®

On January 1, 2002, Darling’s repaired the powertrain control module on a 2002 Ford Explorer, and on April 2, 2002, Darling’s repaired the powertrain control module on a 2001 Ford Ranger. Both of these repairs were also made without first calling for RTDA prior approval. Ford rejected Darling’s’ claims for reimbursement on these two repairs for lack of an RTDA code. Subsequently, Darling’s obtained RTDA codes for these claims,’ which Darling’s submitted to Ford on J uly 15, 2002. Ford paid these two claims, but for less than the full-amount Darling’s sought.

Darling’s contends that Ford cannot refuse to pay a valid warranty claim for the sole reason that Darling’s failed to obtain prior approval before effecting the repairs because of the Maine statutory requirements, specifically, 10 M.R.S.A. $1176. Ford contends, and the District Court agreed, that the request for prior approval for specific repairs under its RTDA program is a reasonable requirement and that enforcement of

such a requirement by refusing to pay for repairs completed in violation thereof is not

> After the fact, Darling’s was able to convince the local Ford representative, Anne W. Green, to attempt a retro-approval under the RTDA program.

° The District Court found that more likely than not, this repair was a valid warranty repair, meaning it was necessary and in fact performed. See Findings of Fact and Conclusions of Law of the Bangor District Court (Russell, J.).

T After the fact, Darling’s was able to convince the local Ford representative, Anne W. Green, to attempt a retro-approval under the RTDA program. precluded by 10 M.R.S.A. $1176. Ford also asserts that the RTDA program is binding on Darling’s under its contract with Ford. Discussion

A. Standard of Review

Pursuant to Rule 76D of the Maine Rules of Civil Procedure, Darling’s as the Plaintiff, may appeal only on questions of law. Furthermore, “[a]ny findings of fact of the District Court shall not be set aside unless clearly erroneous.” M.R.Civ.P. 76D.

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