Darling's Bangor Ford v. Ford Motor Company

CourtSuperior Court of Maine
DecidedMay 16, 2018
DocketCUMbcd-ap-17-05
StatusUnpublished

This text of Darling's Bangor Ford v. Ford Motor Company (Darling's Bangor Ford v. Ford Motor Company) 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 Company, (Me. Super. Ct. 2018).

Opinion

STATE OF MAINE SUPERIOR COURT CUMBERLAND, ss. BUSINESS AND CONSUMER COURT LOCATION: PORTLAND . DOCKET NO. BCD-AP-17-05 /

DARLING'S BANGOR FORD ) ) Appellee/ Cross-Appellant, ) ) V. ) ORDER ON APPEAL ) FORD MOTOR COMPANY, ) ) Appellant/ Cross-Appellee. )

This matter comes before the Court on appeal of a small claims judgment (the ''Judgment")

entered by the Bangor District Court (Budd, J .) in Docket No. SC-17-228 (July 14, 2017). Both

parties appeal certain aspects of the Judgment. The Court heard oral argument on the appeal on

January 24, 2018. Michelle Schaffer, Esq. appeared pro hac vice for Appellant/ Cross-Appellee

Ford Motor Company ("Ford") and Judy Metcalf, Esq. appeared for Appellee/ Cross-Appellant

Darling's Bangor Ford ("Darling's").

FACTUAL BACKGROUND AND PROCEDURAL HISTORY

The District Cou1t found the following facts, which are uncontested:

Ford is a motor vehicle manufacturer and franchisor. (Judgment l .') Darling's is a motor

vehicle dealer and a franchisee of Ford. (Id.) This dispute arises out of Darling's submission of a

claim to Ford seeking reimbursement for 61 days of administrative labor associated with storage

of a 2013 Ford F-150 pickup truck (the "Truck") pending a recall repair between May 31, 2016

and July 31, 2016, and Ford's refusal to reimburse this claim. (Id.)

On April 30, 2016, Darling's acquired the Truck as a trade-in as part of a customer's

•The five-page Judgment did not include page m1rnbers. The Court refers to pages by number in acco rdance with their sequence as entered.

1 purchase of a new vehicle. (Id. 2.) On May 24, 2016, Ford issued a safety recall and notified

Darling's through an Advance Notice of Safety Recall 16S24 (the "Recall" or "Recall 16S24")

(Pl's Ex. 5•). (Id.) The Recall related to a seal in the brake master cylinder which could become

compromised and allow brake fluid to leak. (Id.) The Advance Notice of Recall stated that Ford

did not have sufficient quantities of the parts necessary to repair all vehicles subject to the Recall

and did not expect to have the needed quantity of parts until "late third quaiter 2016." (Id.) The

Advance Notice included language in bold typeface informing dealers that "Federal law" required

them to complete the Recall service before delivery of new vehicles. (Id.) Tl1e Advance Notice

informed vehicle owners that the Recall must still be performed even if the owner had paid for a

previous repair. (Id.) The Advance Notice was apparently responsive to a National Highway

Traffic Safety Administration ("NHTSA") "Safety Recall Report" (Pl's Ex. 6) dated May 23,

2016, that detailed the class of affected vehicles, the possible defect, and the number of potentially

affected vehicles. (id.)

Darling's submitted a claim to Ford (Pt's Ex. 9), seeking reimbursement for 61 days of

administrative labor associated with storage between May 31, 2016 and July 31, 2016, during

which the Truck could not be repaired because Ford had not yet supplied Darling's with the

necessary replacement parts. Although the vehicle remained available for sale during this period,

the safety recall and the resulting downgrade of the Truck's status had the practical effect of

rendering the vehicle unable to be sold until it could be repaired. (Judgment 3.) The repair was

made on or about October 4, 2016. (Id. 2.) The Truck was sold December 9, 2016. (Id.) (See P!'s

Ex. 19.)

On October 6, 2016, Ford sent Darling's a letter (Pl's Ex. 16), declining to reimburse the

, Exhibit numbers are consistent with those used at trial.

2 claim "for vehicle storage related to dealership-owned used vehicles for which there is neither a

legal impediment nor Ford Motor Company directive limiting resale." (Judgment 3 .) Ford

characterized Darling's actions during the 61-day period as a "unilateral decision" by Darling's to

hold the vehicles that were awaiting delivery of the needed parts. (Id.)

The assertion in Ford's letter of October 6, 2016 that Darling's had unilaterally decided to

hold the vehicles was refuted by the evidence at hearing. (Id. 3-4.) As a result of the recall, Ford

revoked the Truck's ''certified pre-owned" designation, which diminished the Truck's

marketability. (Id. 2-3.) Ford's witness, Patrick Curtin , acknowledged that there is no evidence

that Darling's withheld the vehicle from sale or turned away any potential buyers of the Truck.

(Id. 3-4.) Mr. Cu1tin also acknowledged that Darling's had an obligation to disclose the

manufacturer's recall to a prospective buyer, which put Darling's in the position of finding a buyer

who was willing to pay for a car that was defective as declared by the NHTSA. (Id. 3.)

The District Court entered judgment for Darling's and ordered Ford to reimburse Darling's

$1,830 for the administrative labor costs it incurred over the 61-day period. (Id. 4.) Citing

M.R .S .C .P. 1, the District Court declined to award Darling's its costs and attorney fees and ordered

each party to pay its own legal fees . (Id . 4-5.) The District Court entered its judgment on July 14,

2017. Ford filed its notice of appeal to the Superior Court on August 11, 2017; Darling's filed its

notice of cross-appeal on August 21, 2017. This Court accepted the appeal for transfer to the

Business and Consumer Court on October 2, 2017.

STANDARD OF REVIEW

When a jury trial has not been requested, the Superior Court's review of a small-claims

judgment rendered by the district court is limited to questions of law only. M.R.S.C.P. ll(d);

Taylor v. Walker, 2017 ME 218,, 6, 173 AJd 539. Issues of fact may not be retried unless the

3 appellant has requested a jury trial de nova. M.R.S .C.P. ll(d); Taylor, 2017 ME 218JJ 5, 173 A.3d

539. In this case, neither Ford as appellant nor Darling's as cross-appellant has requested a jury

trial. Accordingly, appellate review is limited to matters of law. M.R.S.C.P. ll(d).

DISCUSSION

1. FORD'S APPEAL

Ford claims that the District Court erred as a matter of law in that its judgment fails to

account for the "express limitations" of 10 M.R.S. § 1176 and ignores the parties' contractual

agreement . (Ford's Br. 12-16.') A threshold inquiry, however, is whether Ford is foreclosed from

raising these issues now, or whether it is bound by the reason it gave in its initial denial of Darling's

request for reimbursement in Ford's Jetter of October 6, 2016. (Darling's Opp'n 3-4, 11-13 .')

Under 11 M.R.S.A. § 1176, "All claims must be either approved or disapproved within 60

days of their receipt . . . , When a claim is disapproved, the franchisee that submitted the claim

must be notified in writing of the claim's disapproval within that period, together with the specific

reasons for its disapproval." Darling's takes the position that under this provision of section 1176,

Ford's October 6, 2016 written reason for disapproval is the only reason that may be considered

by the District Court and by this Court on appeal. (Darling's Opp'n 12.)

The Superior Court (Penobscot County, Mills, J.) has held that the result of a franchisor's

failure to respond to a claim in writing within the statutorily prescribed period is that the claim is

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Darling's Bangor Ford v. Ford Motor Company, Counsel Stack Legal Research, https://law.counselstack.com/opinion/darlings-bangor-ford-v-ford-motor-company-mesuperct-2018.